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Is Pfizer's Discounted Valuation a Buying Opportunity or a Value Trap?
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Key Takeaways
Pfizer trades below industry valuations as investors weigh fading COVID sales and patent risks.
PFE expects mostly flat-to-lower 2026 revenues and EPS amid COVID declines and LOE headwinds.
Pfizer is banking on oncology, obesity programs and acquired assets to support future growth.
Pfizer's (PFE - Free Report) stock currently trades at 8.95 forward earnings, significantly lower than 17.81 for the industry as well as the stock’s five-year mean of 9.58. The stock also trades far below other large drugmakers like AbbVie, AstraZeneca, J&J, Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) .
Image Source: Zacks Investment Research
Though the stock looks attractive relative to the industry, a discounted valuation like Pfizer's does not automatically mean one should buy a stock. To make an informed decision, whether this discounted valuation is a buying opportunity or a value trap, it is important to evaluate the company’s fundamentals by examining its key strengths and weaknesses.
Declining Sales of PFE’s COVID Products
The biggest reason PFE trades below the industry average is that investors are uncertain about its long-term revenue growth. During the pandemic, Pfizer generated extraordinary COVID-related sales from Comirnaty and Paxlovid. Those revenues have fallen sharply.
Sales of Pfizer’s COVID products, Comirnaty and Paxlovid, came down to around $11 billion in 2024 and $6.7 billion in 2025 from $56.7 billion in 2022. Sales of Comirnaty are declining due to a narrow recommendation for COVID vaccines in the United States, while Paxlovid is experiencing reduced demand from lower infection rates.
In 2026, Pfizer expects its COVID revenues to be around $5 billion, representing a decline from 2025 COVID sales of around $6.7 billion as COVID infection rates are expected to continue to decline.
PFE’s LOE Headwinds
Pfizer faces a significant patent cliff later this decade. Pfizer expects a significant negative impact on revenues from the loss of exclusivity (“LOE”) in the 2026-2030 period as several of its key products, including Eliquis, Ibrance, Xeljanz and Xtandi, face patent expirations. The LOE cliff is expected to hurt sales by approximately $1.5 billion in 2026.
PFE’s 2026 Financial Outlook Dull
Pfizer’s revenue and earnings guidance for 2026 represents mostly flat to slightly negative growth.
The company expects total revenues for 2026 to be between $59.5 billion and $62.5 billion. The range represents a decline from 2025 revenues of $62.6 billion due to lower revenues from COVID products, Comirnaty and Paxlovid, and loss of revenues from the upcoming patent cliff.
In 2026, Pfizer expects adjusted earnings per share in the range of $2.80-$3.00, which represents a decline from 2025 EPS of $3.22 due to the dilutive impact of 3SBio and Metsera deals, lower COVID revenues and higher taxes.
However, not everything is going wrong at Pfizer. Let’s see the positives.
PFE’s New & Acquired Products Drive Top-Line Growth
Pfizer’s dependence on its COVID business has now reduced. Its non-COVID operational revenues are improving, driven by key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen. Revenues from Pfizer’s non-COVID products rose 7% operationally in the first quarter. Pfizer's recently launched and acquired products delivered revenues of $3.1 billion in the first quarter, rising 22% on a year-over-year basis. In 2026, Pfizer expects its recently launched and acquired products to record continued double-digit growth.
Pfizer is also trying to rebuild its pipeline through acquisitions. Seagen, Metsera and Biohaven are the most significant strategic acquisitions in recent years. In 2025, Pfizer invested around $9 billion in M&A deals, including the acquisition of Metsera and the licensing deal with 3SBio. The November 2025 acquisition of obesity drugmaker, Metsera, has brought Pfizer back into the lucrative obesity space after it scrapped the development of danuglipron, a weight-loss pill, early in 2025. It plans to start 20+ obesity studies in 2026, including 10 phase III studies for its monthly GLP-1 receptor agonist, berobenatide for obesity and obesity-related comorbidities, including knee osteoarthritis and obstructive sleep apnea. However, in the obesity space, Pfizer lags far behind leaders like Lilly and Novo Nordisk.
The company expects its recently launched and acquired products and a strong pipeline to help revive top-line growth toward the end of the decade.
Pfizer’s significant cost reduction and efforts to improve R&D productivity measures are also driving profit growth. Pfizer’s dividend yield stands at around 6.6%, which is also impressive.
PFE Enjoys a Strong Position in Oncology
Pfizer is one of the largest and most successful drugmakers in oncology. Its position in oncology was strengthened with the acquisition of Seagen in 2023.
Oncology sales comprise around 27% of its total revenues. Its oncology revenues grew 7% to $3.8 billion in the first quarter of 2026, driven by drugs like Lorbrena, the Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer.
Pfizer is also advancing its oncology clinical pipeline across areas such as breast, thoracic, gastrointestinal and blood cancer. Several oncology candidates have entered late-stage development. Pfizerplans to start four pivotal studies for PF-08634404, a dual PD-1/VEGF inhibitor that it in-licensed from Chinese biotech 3SBio in 2025.
By 2030, it expects to have eight or more blockbuster oncology medicines in its portfolio.
PFE Stock’s Price, Estimates & Valuation
Pfizer’s stock has risen 5.3% so far this year compared with an increase of 5.4% for the industry.
PFE Stock Outperforms Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has risen from $2.98 to $2.99, while that for 2027 has risen from $2.81 to $2.86 over the past 60 days.
PFE Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in PFE Stock
Pfizer’s discounted valuation reflects that investors remain cautious about the company’s long-term growth prospects. The market is concerned about Pfizer’s ability to replace declining COVID-related revenues and offset upcoming patent expirations through new product launches, pipeline development and contributions from its Seagen acquisition. As a result, investors are unwilling to assign the stock a valuation multiple comparable to faster-growing pharmaceutical companies.
At the same time, the discounted valuation may suggest that some of these concerns are already reflected in the share price.
The company is rebuilding its pipeline in oncology and obesity, which it believes can drive growth in 2028 and beyond. Although Pfizer’s 2026 sales guidance indicates minimal growth, the company expects a high single-digit revenue CAGR for five years starting in 2029. Pfizer expects the growth to be driven by its advancing R&D pipeline and the continued progress of new and acquired products. If Pfizer can successfully execute on this strategy and generate meaningful growth from its newer assets and restore revenue growth, the stock's discounted valuation could prove justified.
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Is Pfizer's Discounted Valuation a Buying Opportunity or a Value Trap?
Key Takeaways
Pfizer's (PFE - Free Report) stock currently trades at 8.95 forward earnings, significantly lower than 17.81 for the industry as well as the stock’s five-year mean of 9.58. The stock also trades far below other large drugmakers like AbbVie, AstraZeneca, J&J, Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) .
Though the stock looks attractive relative to the industry, a discounted valuation like Pfizer's does not automatically mean one should buy a stock. To make an informed decision, whether this discounted valuation is a buying opportunity or a value trap, it is important to evaluate the company’s fundamentals by examining its key strengths and weaknesses.
Declining Sales of PFE’s COVID Products
The biggest reason PFE trades below the industry average is that investors are uncertain about its long-term revenue growth. During the pandemic, Pfizer generated extraordinary COVID-related sales from Comirnaty and Paxlovid. Those revenues have fallen sharply.
Sales of Pfizer’s COVID products, Comirnaty and Paxlovid, came down to around $11 billion in 2024 and $6.7 billion in 2025 from $56.7 billion in 2022. Sales of Comirnaty are declining due to a narrow recommendation for COVID vaccines in the United States, while Paxlovid is experiencing reduced demand from lower infection rates.
In 2026, Pfizer expects its COVID revenues to be around $5 billion, representing a decline from 2025 COVID sales of around $6.7 billion as COVID infection rates are expected to continue to decline.
PFE’s LOE Headwinds
Pfizer faces a significant patent cliff later this decade. Pfizer expects a significant negative impact on revenues from the loss of exclusivity (“LOE”) in the 2026-2030 period as several of its key products, including Eliquis, Ibrance, Xeljanz and Xtandi, face patent expirations. The LOE cliff is expected to hurt sales by approximately $1.5 billion in 2026.
PFE’s 2026 Financial Outlook Dull
Pfizer’s revenue and earnings guidance for 2026 represents mostly flat to slightly negative growth.
The company expects total revenues for 2026 to be between $59.5 billion and $62.5 billion. The range represents a decline from 2025 revenues of $62.6 billion due to lower revenues from COVID products, Comirnaty and Paxlovid, and loss of revenues from the upcoming patent cliff.
In 2026, Pfizer expects adjusted earnings per share in the range of $2.80-$3.00, which represents a decline from 2025 EPS of $3.22 due to the dilutive impact of 3SBio and Metsera deals, lower COVID revenues and higher taxes.
However, not everything is going wrong at Pfizer. Let’s see the positives.
PFE’s New & Acquired Products Drive Top-Line Growth
Pfizer’s dependence on its COVID business has now reduced. Its non-COVID operational revenues are improving, driven by key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen. Revenues from Pfizer’s non-COVID products rose 7% operationally in the first quarter. Pfizer's recently launched and acquired products delivered revenues of $3.1 billion in the first quarter, rising 22% on a year-over-year basis. In 2026, Pfizer expects its recently launched and acquired products to record continued double-digit growth.
Pfizer is also trying to rebuild its pipeline through acquisitions. Seagen, Metsera and Biohaven are the most significant strategic acquisitions in recent years. In 2025, Pfizer invested around $9 billion in M&A deals, including the acquisition of Metsera and the licensing deal with 3SBio. The November 2025 acquisition of obesity drugmaker, Metsera, has brought Pfizer back into the lucrative obesity space after it scrapped the development of danuglipron, a weight-loss pill, early in 2025. It plans to start 20+ obesity studies in 2026, including 10 phase III studies for its monthly GLP-1 receptor agonist, berobenatide for obesity and obesity-related comorbidities, including knee osteoarthritis and obstructive sleep apnea. However, in the obesity space, Pfizer lags far behind leaders like Lilly and Novo Nordisk.
The company expects its recently launched and acquired products and a strong pipeline to help revive top-line growth toward the end of the decade.
Pfizer’s significant cost reduction and efforts to improve R&D productivity measures are also driving profit growth. Pfizer’s dividend yield stands at around 6.6%, which is also impressive.
PFE Enjoys a Strong Position in Oncology
Pfizer is one of the largest and most successful drugmakers in oncology. Its position in oncology was strengthened with the acquisition of Seagen in 2023.
Oncology sales comprise around 27% of its total revenues. Its oncology revenues grew 7% to $3.8 billion in the first quarter of 2026, driven by drugs like Lorbrena, the Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer.
Pfizer is also advancing its oncology clinical pipeline across areas such as breast, thoracic, gastrointestinal and blood cancer. Several oncology candidates have entered late-stage development. Pfizerplans to start four pivotal studies for PF-08634404, a dual PD-1/VEGF inhibitor that it in-licensed from Chinese biotech 3SBio in 2025.
By 2030, it expects to have eight or more blockbuster oncology medicines in its portfolio.
PFE Stock’s Price, Estimates & Valuation
Pfizer’s stock has risen 5.3% so far this year compared with an increase of 5.4% for the industry.
PFE Stock Outperforms Industry
The Zacks Consensus Estimate for 2026 earnings per share has risen from $2.98 to $2.99, while that for 2027 has risen from $2.81 to $2.86 over the past 60 days.
PFE Estimate Movement
Stay Invested in PFE Stock
Pfizer’s discounted valuation reflects that investors remain cautious about the company’s long-term growth prospects. The market is concerned about Pfizer’s ability to replace declining COVID-related revenues and offset upcoming patent expirations through new product launches, pipeline development and contributions from its Seagen acquisition. As a result, investors are unwilling to assign the stock a valuation multiple comparable to faster-growing pharmaceutical companies.
At the same time, the discounted valuation may suggest that some of these concerns are already reflected in the share price.
The company is rebuilding its pipeline in oncology and obesity, which it believes can drive growth in 2028 and beyond. Although Pfizer’s 2026 sales guidance indicates minimal growth, the company expects a high single-digit revenue CAGR for five years starting in 2029. Pfizer expects the growth to be driven by its advancing R&D pipeline and the continued progress of new and acquired products. If Pfizer can successfully execute on this strategy and generate meaningful growth from its newer assets and restore revenue growth, the stock's discounted valuation could prove justified.
Long-term investors may consider retaining this Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.