Pfizer Earnings: Seagen Impairment and Metsera Tolerability Data Incrementally Negative

Key Morningstar Metrics for Pfizer

• Fair Value Estimate: $32.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Medium

What We Thought of Pfizer’s Earnings

Pfizer PFE reported a 2% decline in revenue and a 4% increase in adjusted EPS in 2025, and management maintained 2026 revenue guidance for $59.5 billion-$62.5 billion (between flat and a 5% decline) and adjusted diluted EPS of $2.80-$3.00. Shares fell 3% intraday on Feb. 3.

Why it matters: Pfizer’s cost cutting allowed it to reverse top-line headwinds to a bottom-line gain in 2025, but cost-cutting leverage is shrinking in 2026, and growth looks increasingly reliant on a few products.

• Padcev stands out as a significant growth driver, as usage expands in earlier stages of bladder cancer in combination with Merck’s Keytruda. Other key products are facing pressure from superior competition (oncology drug Ibrance, vaccine Prevnar, and cardiovascular drug Vyndaqel).
• The pipeline remains critical in determining Pfizer’s ability to pull itself out of a declining top line, but the $4.4 billion impairment in the fourth quarter (partly related to Seagen pipeline programs) and mixed data from Metsera obesity program MET-097i (PF’3944) are concerning.

The bottom line: We’ve lowered our fair value estimate for narrow-moat Pfizer from $34 per share to $32 after lowering our long-term growth and margin expectations, particularly for the Metsera pipeline. However, market sentiment remains extremely weak, making shares appear undervalued.

• New data from PF’3944 phase 2b trial Vesper-3 had a roughly 9% rate of discontinuations due to adverse events, and efforts to increase efficacy beyond that of currently marketed options could worsen this tolerability profile.