Pfizer Rises 5.6% in a Month: How Should You Play the Stock?

Stock Performance & Valuation - Pfizer's stock has risen 5.6% in the past month due to encouraging 2025 guidance [1] - The stock has declined 8.4% in the past year compared to a 1.9% decrease for the industry [11] - Pfizer's forward P/E ratio of 9.05 is lower than the industry's 15.73 and its 5-year mean of 11.26 [12] - The Zacks Consensus Estimate for 2025 EPS has risen from $2.91 to$2.92 over the past 30 days [15] Financial Guidance & Projections - Pfizer projects 2025 revenues between $61.0 billion and$64.0 billion, representing flat to 5% operational growth from 2024 [1] - Adjusted EPS is expected to be $2.80 to$3.00 in 2025, representing 10% to 18% operational growth year-over-year [1] - The company expects 2025-2030 revenue CAGR of approximately 6% [7] COVID-19 Products - Sales of COVID products Comirnaty and Paxlovid are declining due to lower post-pandemic demand [4] - Pfizer expects these products to maintain market share in 2025 with stable pricing [4] - There is uncertainty around COVID product sales as they depend on infection rates [5] Growth Drivers - Non-COVID operational revenues improved in 2024, driven by key products like Vyndaqel and Eliquis [6] - The Seagen acquisition contributed $2.3 billion in sales in the first nine months of 2024, up 38$10 billion in risk-adjusted revenues by 2030 [8] - Oncology sales grew 26% operationally in the first nine months of 2024 and comprise over 26% of total revenues [9] Challenges - Declining sales of COVID-19 products pose a challenge [18] - Loss of patent exclusivity for key products in 2026-2030 will have a significant impact [18] - The Medicare Part D redesign under the Inflation Reduction Act may hurt sales of higher-priced drugs [18] Financial Position & Strategy - Pfizer has a strong cash position from COVID product profits, used for acquisitions, dividends, share buybacks, and debt reduction [19] - The company expects cost cuts and restructuring to deliver at least $5.5 billion in savings [19] - Pfizer offers an attractive dividend yield of around 6.3% [19] Pipeline & Future Outlook - Pfizer has a strong late-stage pipeline and expects to have eight or more blockbuster oncology medicines by 2030 [9] - The company markets six oncology biosimilars and advanced its oncology clinical pipeline in 2024 [9] - Non-COVID drugs and newly acquired products are expected to continue driving growth [19]