Jefferies analyst Jeffrey Holford says his sum-of-the-parts valuation for Pfizer (PFE), after the planned merger with Allergan (AGN) failed, yields 18% potential upside. His analysis points to a share price of $41.90. The analyst sees the upside being "crystallized by 2017" with a potential split back on the table in 2016. The separation of Pfizer's Global Established Pharmaceutical unit is the primary valuation driver for the shares, Holford tells investors in a research note. He believes the cash flow generation and durability of the GEP business are underappreciated. The analyst lowered his price target for Pfizer shares to $39 from $42 and keeps a Buy rating on Pfizer.

Bullish option flow detected in Pfizer with 50,393 calls trading, 2x expected, and implied vol increasing over 2 points to 28.83%. Sep-24 27.5 calls and Mar-25 42.5 calls are the most active options, with total volume in those strikes near 27,600 contracts. The Put/Call Ratio is 0.21. Earnings are expected on May 1st.