Pfizer Earnings: After Solid Results, Reaffirmed 2025 Guidance

Key Morningstar Metrics for Pfizer

• Fair Value Estimate: $42.00
• Morningstar Rating: ★★★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium

What We Thought of Pfizer’s Earnings

Pfizer’s PFE 2024 revenue reached $63.6 billion, near the high end of its $61 billion-$64 billion guidance range. Management reaffirmed expectations for 2025 revenue of $61 billion-$64 billion and adjusted diluted earnings per share of $2.80-$3.00.

Why it matters: Pfizer is rebuilding investor confidence following several commercial and pipeline disappointments, as well as difficulty forecasting covid-19-related sales in 2023.

The bottom line: We are maintaining our fair value estimate of $42 per share. Our $63.9 billion forecast for 2025 is near the high end of management’s guidance.

• We see Pfizer’s diversified portfolio and advancing pipeline as supportive of its wide moat, though recent pipeline setbacks and new competition are keeping the firm’s returns on invested capital below peers’.
• That said, we think investors have overly punished the shares, which now reflect significant regulatory and competitive risks but little to no value for Pfizer’s pipeline.

Coming up: We expect catalysts for the shares in 2025 that should give more clarity on the potential of the firm’s pipeline.

• In the first quarter, Pfizer’s obesity drug candidate danuglipron should have once-daily dosing data that will help determine if it could move to phase 3 trials.
• Pfizer is making excellent progress recovering from the 2023 Seagen acquisition, freeing up capacity for acquisitions in 2025 that could help support ambitions in the rapidly growing obesity market.

Big picture: We think Pfizer’s ability to execute cost-saving programs during a transitional time for its portfolio is helping boost bottom-line growth and maintain confidence in the firm’s ability to grow its dividend.

• While the potential for US vaccine policy changes creates some uncertainty, our US vaccine sales forecast for Pfizer’s portfolio (low-single-digit annual declines) already incorporates vaccine skepticism and competition, although increased litigation risk could create additional downside.