Pfizer Stock Before Q1 Earnings Release: To Buy or Not to Buy?

Core Viewpoint - Pfizer is set to report its first-quarter earnings on April 29, with sales estimated at $13.88 billion and earnings at 67 cents per share, reflecting a slight increase in 2025 earnings estimates from $2.97 to $2.98 per share over the past month [1] Earnings Performance - Pfizer has consistently exceeded earnings expectations in the last four quarters, achieving an average earnings surprise of 44.16%, with a notable surprise of 31.25% in the last quarter [2] Earnings Estimates and Model - The company has an Earnings ESP of -7.23% and holds a Zacks Rank 2 (Buy), indicating a good chance of delivering an earnings beat when combined with a positive Earnings ESP [3] Revenue Drivers - Non-COVID operational revenues improved in 2024, driven by key products like Vyndaqel, Padcev, and Eliquis, as well as new launches and acquisitions from Seagen, which are expected to continue in Q1 [4] - Newly launched drugs such as Velsipity, Penbraya, and gene therapies for hemophilia are anticipated to contribute to top-line growth [5] COVID-19 Product Sales - Sales from the COVID-19 vaccine Comirnaty are expected to decline due to lower global vaccinations, while revenues from Paxlovid improved in the last quarter of 2024 [6][7] - The Zacks Consensus Estimate for Comirnaty sales is $279 million, and for Paxlovid, it is $629 million, with internal estimates slightly lower [7] Specialty and Oncology Segments - In the Specialty Care segment, sales of Vyndaqel are expected to remain strong, while Xeljanz and Enbrel may see declines. The Zacks Consensus Estimate for Vyndaqel sales is $1.42 billion [10] - In Oncology, sales of Ibrance may be negatively impacted by competitive pressures, while sales of Xtandi and newly acquired ADCs are likely to boost overall oncology sales [9] Stock Performance and Valuation - Pfizer's stock has declined 13.7% this year, compared to a 3.6% decrease in the industry, but it appears attractive from a valuation perspective, trading at a forward P/E ratio of 7.54, significantly lower than the industry average of 14.88 [11][14] Investment Thesis - Despite challenges such as declining COVID-19 product sales and upcoming patent expirations, Pfizer is expected to benefit from non-COVID drug growth and cost-cutting measures, projecting savings of at least $6 billion [18][20] - The company maintains a strong dividend yield of over 7%, making it appealing for income investors [21] Long-term Outlook - Investors are encouraged to consider buying Pfizer's stock at its current valuation for potential long-term gains, particularly for value and income investors [22]