Pfizer Stock Rises 7.3% in 3 Months: Should You Invest Now?

Core Viewpoint - Pfizer's stock has shown a significant recovery, rising 7.3% over the past three months, outperforming both the industry and the S&P 500, despite previous struggles due to declining COVID-related product sales [1][2]. Sales Performance - Pfizer's sales from COVID products, Comirnaty and Paxlovid, have sharply declined in 2023, with a projected further decrease in 2024, estimating combined revenues of $8.5 billion compared to $12.5 billion in 2023 [3]. - Overall sales fell 42% in 2023 from a record high of $100 billion in 2022, raising concerns about long-term growth drivers beyond COVID-related products [2]. Growth Drivers - In 2023, Pfizer achieved a record number of FDA approvals, with nine new medicines and vaccines expected to drive future growth [4]. - Non-COVID operational revenues improved in the first half of 2024, supported by key products like Prevnar, Vyndaqel, and Eliquis, as well as new launches and acquisitions, including those from Seagen [4][5]. - Pfizer anticipates a revenue CAGR of approximately 6% from 2025 to 2030, bolstered by its late-stage pipeline and newly acquired products [4]. Oncology Position - Pfizer has a strong position in oncology, with oncology sales accounting for over 26% of total revenues and growing 23% on an operational basis in the first half of 2024 [6]. - The acquisition of Seagen has further strengthened Pfizer's oncology portfolio, with expectations of having eight or more blockbuster oncology medicines by 2030 [6]. Valuation and Earnings Estimates - Pfizer's stock is currently trading at a forward P/E ratio of 10.68, which is lower than the industry average of 19.77 and its own 5-year mean of 11.44, indicating an attractive valuation [7]. - The Zacks Consensus Estimate for earnings per share has increased from $2.39 to $2.62 for 2024 and from $2.75 to $2.85 for 2025 over the past 60 days, reflecting a positive outlook [8][9]. Investment Consideration - Pfizer is seen as gradually recovering from previous downturns, with non-COVID drugs and new product contributions driving growth [10]. - The company maintains a dividend yield of around 6% and expects to achieve savings of $4 billion in 2024 through cost cuts and restructuring [10]. - Rising earnings estimates suggest an optimistic outlook for Pfizer's growth potential, making it a candidate for investment at its current valuation [10].