NEW YORK Shares of Pfizer Inc (PFE.N) are "substantially" undervalued because of investor pessimism about the company's roster of experimental medicines, but a new chief executive with industry experience could brighten the drugmaker's prospects, hedge fund manager David Einhorn said on Tuesday.
Einhorn expressed his optimism two days after Jeffrey Kindler resigned as CEO of the world's largest pharmaceuticals company. Kindler, a lawyer who once ran the McDonald's Corp-owned Boston Market restaurant chain, was replaced by Ian Read, a 32-year Pfizer veteran who had overseen the company's core pharmaceuticals business since 2006.
"There was a lot of criticism by other market participants about the background of the previous CEO," Einhorn said at Reuters' Investment Outlook Summit in New York. "The stock did not do very much for the last several years, and there's an opportunity perhaps for them to have a new strategy."
Pfizer shares, trading Tuesday at $16.84, have lost about 27 percent since Kindler became chief executive in July 2006.
Einhorn said Pfizer shares, even excluding the value of the company's drug pipeline, are worth "considerably" more than their current price.
Asked if their value is in the "low twenties," he replied: "Oh yes, well above that."
Einhorn holds $387 million in Pfizer stock, his third-biggest holding.
(Reporting by Ransdell Pierson; Editing by Padraic Cassidy)