Pfizer Stock Up Almost 6% in 3 Months: Time to Buy, Sell or Hold?

Core Viewpoint - Pfizer is experiencing a transition phase with declining COVID product sales but growth in non-COVID drugs and new acquisitions, positioning the company for future operational growth [2][3][17]. Sales Performance - Sales of Pfizer's COVID products, Comirnaty and Paxlovid, are projected to decline to approximately $11 billion in 2024 from $56.7 billion in 2022, with similar revenues expected in 2025, excluding one-time benefits [3]. - Non-COVID operational revenues improved by 12% in 2024, surpassing the guidance range of 9-11%, driven by key products and new acquisitions [4]. Growth Drivers - Pfizer's acquisition of Seagen and the performance of its oncology drugs, which generated $3.4 billion in sales in 2024 (up 38% pro forma), are significant contributors to growth [6][7]. - The oncology segment accounts for about 25% of total revenues, with a 26% operational growth in 2024, supported by drugs like Xtandi and Padcev [7]. Stock Performance and Valuation - Pfizer's stock has risen 5.9% over the past three months, although it has declined 9.8% in the last six months, underperforming the industry [1][8]. - The stock is trading at a forward price/earnings ratio of 9.0, lower than the industry average of 17.51 and its own 5-year mean of 11.11, indicating an attractive valuation [10]. Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings has increased from $2.93 to $2.97 per share, while the estimate for 2026 has decreased from $3.04 to $2.99 per share [11]. Future Outlook - Pfizer anticipates continued growth in non-COVID sales and significant cost reductions, aiming for savings of at least $6 billion, which should support profit growth [17]. - The company returned $9.5 billion to shareholders through dividends in 2024, with a dividend yield of around 6.4%, making it appealing for long-term investors [18].