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Pfizer Stock Up 5% Following Q1 Results: Time to Buy, Sell or Hold?
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Pfizer's (PFE - Free Report) stock has risen 5% since it reported first-quarter results on April 29. While the company beat estimates for earnings, it missed the same for sales. Earnings of 92 cents per share rose 12% year over year due to higher gross margins and cost control. However, revenues declined 6% on an operational basis as higher sales of the Vyndaqel family, Padcev, Lorbrena, Nurtec and Comirnaty vaccine were offset by lower sales of some key products like Paxlovid, Prevnar, Xeljanz, Eliquis and Ibrance. Higher manufacturer discounts resulting from the Medicare Part D redesign under the Inflation Reduction Act (IRA), which took effect in the first quarter, hurt U.S. revenues by $650 million.
However, despite the sales miss, Pfizer maintained its earnings and sales outlook for the year. Pfizer projects total revenues between $61.0 billion and $64.0 billion, while earnings are expected in the range of $2.80 to $3.00 per share. Pfizer’s chief financial officer, David Denton, said that the company is trending toward the upper end of the adjusted EPS guidance range.
The guidance does not include the potential impact of future tariffs and trade policy changes. However, the company expects an impact of approximately $150 million in 2025 from tariffs already in place. Pfizer’s CEO, Albert Bourla, said on the call that 25% tariffs on pharma imports are unlikely. However, if the import tariffs are implemented in the future, Pfizer said it has detailed contingency plans to manage the impact. The CEO said they have enough room at their manufacturing sites in the United States, particularly for injectables, if they have to transfer production to domestic facilities. Pfizer’s positive comments about the impact of a potential tariff being manageable led the stock to increase despite a softer quarterly performance.
Nonetheless, a single quarter’s results are not so important for long-term investors, and the focus should rather be on the company’s strong fundamentals. Let’s understand the company’s strengths and weaknesses to better analyze how to play PFE’s stock in the post-earnings scenario.
Sales of PFE’s COVID Products Declining
With the end of the pandemic, sales of Pfizer’s COVID products, Comirnaty and Paxlovid, came down to around $11 billion in 2024 from $56.7 billion in 2022. In 2025, Pfizer’s revenues from Paxlovid and Comirnaty are expected to be similar to 2024, excluding the $1.2 billion in one-time benefits from Paxlovid. COVID revenues may decline further in future years, depending on infection rates.
PFE’s New Drugs & Seagen Acquisition Drive the Top Line
Though COVID revenues are declining, Pfizer’s non-COVID operational revenues improved in 2024, driven by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen (December 2023. The positive trend continued in the first quarter of 2025. Continued growth of Pfizer’s diversified portfolio of drugs, particularly oncology, should support top-line growth in 2025.
Pfizer’s new products/late-stage pipeline candidates and newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond.
PFE Enjoys a Strong Position in Oncology
Pfizer is one of the largest and most successful drugmakers in oncology. The addition of Seagen strengthened its position in oncology.
Its oncology revenues grew 7% on an operational basis in the first quarter of 2025, driven by drugs like Xtandi, Lorbrena, the Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer also advanced its oncology clinical pipeline with several candidates entering late-stage development, like sasanlimab, vepdegestrant and sigvotatug vedotin.
Pfizer is also working on expanding the labels of approved products (oncology as well as non-oncology) like Padcev, Adcetris, Litfulo, Nurtec, Velsipity and Elrexfio, among others.
Pfizer’s Other Headwinds in 2025
Though Pfizer expects a moderate negative impact on revenues from the loss of exclusivity in 2025, the impact is expected to be significant in the 2026-2030 period as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi, will face patent expirations.
Pfizer expects an unfavorable impact of approximately $1 billion from the Medicare Part D redesign under the IRA, which takes effect in 2025. Higher-priced drugs, including Vyndaqel, Ibrance, Xtandi and Xeljanz, are expected to be most affected by the IRA.
The company has also faced its share of setbacks. Earlier this month, Pfizer said it is discontinuing the development of its GLP-1R agonist, danuglipron, which was developed as a weight loss pill. Pfizer took the decision after one of the participants in the dose-optimization studies developed a potentially drug-induced liver injury, which resolved after danuglipron was discontinued. Novo Nordisk (NVO - Free Report) and Lilly (LLY - Free Report) currently dominate the obesity market with their GLP-1 injections.
Moreover, stocks of vaccine makers like Pfizer have been under pressure with the appointment of Robert F. Kennedy Jr., a well-known vaccine skeptic, as the Secretary of Health and Human Services (HHS).
Pfizer’s stock has declined 7.3% so far this year against an increase of 2.4% for the industry.
PFE Stock Underperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the company’s shares currently trade at 7.86 forward earnings, lower than 15.70 for the industry and the stock’s 5-year mean of 10.99. The stock is also much cheaper than other large drugmakers like AbbVie, Novo Nordisk, Lilly, AstraZeneca, J&J and others.
PFE Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has risen from $2.99 per share to $3.07 per share, while that for 2026 has gone up from $3.02 to $3.10 per share over the past seven days.
PFE Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in PFE Stock
Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products, U.S. Medicare Part D headwinds, the upcoming loss of exclusivity (LOE) cliff, uncertainties around tariffs and a volatile macro environment. However, with COVID-related uncertainties diminishing, its revenue volatility is declining. Pfizer’s key drugs like Vyndaqel, Padcev and Eliquis and new and newly acquired products should continue to drive top-line growth.
Pfizer expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Pfizer’s significant cost-reduction and efforts to improve R&D productivity measures should drive profit growth. Though Pfizer does not expect strong top-line growth over the next three years due to the LOEs, it expects EPS growth.
Though scrapping danuglipron was a big setback, Pfizer is committed to building its cardiometabolic pipeline, including obesity, by advancing internal programs such as its GIPR antagonist and pursuing external opportunities that could include partnerships or acquisitions.
Pfizer returned $2.4 billion directly to shareholders through dividends in the first quarter of 2025. Its dividend yield stands at around 7.1%, which is impressive.
Investors may consider buying this Zacks Rank #2 (Buy) stock at the present cheap valuation for long-term gains, keeping track of the company’s newer growth prospects. It will be a great pick for value investors, considering its cheap valuation, as well as for income investors due to its sky-high dividend yield.
Image: Bigstock
Pfizer Stock Up 5% Following Q1 Results: Time to Buy, Sell or Hold?
Pfizer's (PFE - Free Report) stock has risen 5% since it reported first-quarter results on April 29. While the company beat estimates for earnings, it missed the same for sales. Earnings of 92 cents per share rose 12% year over year due to higher gross margins and cost control. However, revenues declined 6% on an operational basis as higher sales of the Vyndaqel family, Padcev, Lorbrena, Nurtec and Comirnaty vaccine were offset by lower sales of some key products like Paxlovid, Prevnar, Xeljanz, Eliquis and Ibrance. Higher manufacturer discounts resulting from the Medicare Part D redesign under the Inflation Reduction Act (IRA), which took effect in the first quarter, hurt U.S. revenues by $650 million.
However, despite the sales miss, Pfizer maintained its earnings and sales outlook for the year. Pfizer projects total revenues between $61.0 billion and $64.0 billion, while earnings are expected in the range of $2.80 to $3.00 per share. Pfizer’s chief financial officer, David Denton, said that the company is trending toward the upper end of the adjusted EPS guidance range.
The guidance does not include the potential impact of future tariffs and trade policy changes. However, the company expects an impact of approximately $150 million in 2025 from tariffs already in place. Pfizer’s CEO, Albert Bourla, said on the call that 25% tariffs on pharma imports are unlikely. However, if the import tariffs are implemented in the future, Pfizer said it has detailed contingency plans to manage the impact. The CEO said they have enough room at their manufacturing sites in the United States, particularly for injectables, if they have to transfer production to domestic facilities. Pfizer’s positive comments about the impact of a potential tariff being manageable led the stock to increase despite a softer quarterly performance.
Nonetheless, a single quarter’s results are not so important for long-term investors, and the focus should rather be on the company’s strong fundamentals. Let’s understand the company’s strengths and weaknesses to better analyze how to play PFE’s stock in the post-earnings scenario.
Sales of PFE’s COVID Products Declining
With the end of the pandemic, sales of Pfizer’s COVID products, Comirnaty and Paxlovid, came down to around $11 billion in 2024 from $56.7 billion in 2022. In 2025, Pfizer’s revenues from Paxlovid and Comirnaty are expected to be similar to 2024, excluding the $1.2 billion in one-time benefits from Paxlovid. COVID revenues may decline further in future years, depending on infection rates.
PFE’s New Drugs & Seagen Acquisition Drive the Top Line
Though COVID revenues are declining, Pfizer’s non-COVID operational revenues improved in 2024, driven by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen (December 2023. The positive trend continued in the first quarter of 2025. Continued growth of Pfizer’s diversified portfolio of drugs, particularly oncology, should support top-line growth in 2025.
Pfizer’s new products/late-stage pipeline candidates and newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond.
PFE Enjoys a Strong Position in Oncology
Pfizer is one of the largest and most successful drugmakers in oncology. The addition of Seagen strengthened its position in oncology.
Its oncology revenues grew 7% on an operational basis in the first quarter of 2025, driven by drugs like Xtandi, Lorbrena, the Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer also advanced its oncology clinical pipeline with several candidates entering late-stage development, like sasanlimab, vepdegestrant and sigvotatug vedotin.
Pfizer is also working on expanding the labels of approved products (oncology as well as non-oncology) like Padcev, Adcetris, Litfulo, Nurtec, Velsipity and Elrexfio, among others.
Pfizer’s Other Headwinds in 2025
Though Pfizer expects a moderate negative impact on revenues from the loss of exclusivity in 2025, the impact is expected to be significant in the 2026-2030 period as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi, will face patent expirations.
Pfizer expects an unfavorable impact of approximately $1 billion from the Medicare Part D redesign under the IRA, which takes effect in 2025. Higher-priced drugs, including Vyndaqel, Ibrance, Xtandi and Xeljanz, are expected to be most affected by the IRA.
The company has also faced its share of setbacks. Earlier this month, Pfizer said it is discontinuing the development of its GLP-1R agonist, danuglipron, which was developed as a weight loss pill. Pfizer took the decision after one of the participants in the dose-optimization studies developed a potentially drug-induced liver injury, which resolved after danuglipron was discontinued. Novo Nordisk (NVO - Free Report) and Lilly (LLY - Free Report) currently dominate the obesity market with their GLP-1 injections.
Moreover, stocks of vaccine makers like Pfizer have been under pressure with the appointment of Robert F. Kennedy Jr., a well-known vaccine skeptic, as the Secretary of Health and Human Services (HHS).
PFE’s Stock Performance, Rising Estimates & Attractive Valuation
Pfizer’s stock has declined 7.3% so far this year against an increase of 2.4% for the industry.
PFE Stock Underperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the company’s shares currently trade at 7.86 forward earnings, lower than 15.70 for the industry and the stock’s 5-year mean of 10.99. The stock is also much cheaper than other large drugmakers like AbbVie, Novo Nordisk, Lilly, AstraZeneca, J&J and others.
PFE Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has risen from $2.99 per share to $3.07 per share, while that for 2026 has gone up from $3.02 to $3.10 per share over the past seven days.
PFE Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in PFE Stock
Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products, U.S. Medicare Part D headwinds, the upcoming loss of exclusivity (LOE) cliff, uncertainties around tariffs and a volatile macro environment. However, with COVID-related uncertainties diminishing, its revenue volatility is declining. Pfizer’s key drugs like Vyndaqel, Padcev and Eliquis and new and newly acquired products should continue to drive top-line growth.
Pfizer expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Pfizer’s significant cost-reduction and efforts to improve R&D productivity measures should drive profit growth. Though Pfizer does not expect strong top-line growth over the next three years due to the LOEs, it expects EPS growth.
Though scrapping danuglipron was a big setback, Pfizer is committed to building its cardiometabolic pipeline, including obesity, by advancing internal programs such as its GIPR antagonist and pursuing external opportunities that could include partnerships or acquisitions.
Pfizer returned $2.4 billion directly to shareholders through dividends in the first quarter of 2025. Its dividend yield stands at around 7.1%, which is impressive.
Investors may consider buying this Zacks Rank #2 (Buy) stock at the present cheap valuation for long-term gains, keeping track of the company’s newer growth prospects. It will be a great pick for value investors, considering its cheap valuation, as well as for income investors due to its sky-high dividend yield.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.