Morningstar

Pfizer Earnings: Strong First-Quarter Performance Makes 2026 Guidance More Achievable

We think Pfizer stock looks undervalued, as investors underestimate its ability to stabilize and then grow revenue beyond the 2027-28 patent cliff.

Exterior view of the Pfizer headquarters building.
Kena Betancur/VIEWpress via Getty
Securities in This Article
Pfizer Inc
(PFE)

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 5% top-line growth but an 18% decline in adjusted diluted EPS, mostly due to royalty expenses weighing on its gross margin. Management maintained its full-year guidance for $59.5 billion-$62.5 billion in revenue and adjusted diluted EPS of $2.80-$3.00. Shares rose 1% intraday on May 5.

Why it matters: Pfizer’s solid performance in the first quarter sets it up nicely to meet its guidance for the full year, regardless of swings in demand this fall for covid vaccines and treatments.

  • Pfizer’s oncology drugs Padcev (39% growth) and Lorbrena (38% growth), and its migraine drug Nurtec (42% growth), are growing strongly as prescribing labels expand and market share increases.
  • This helped counter a 60% decline in covid revenue as Pfizer sees shrinking demand due to a narrower approved label in the United States, the end of a UK contract, and globally milder covid seasons.

The bottom line: We maintain our $32 fair value estimate for narrow-moat Pfizer, and we expect 1% sales declines in 2026 and 2027, ahead of a larger high-single-digit decline in 2028.

  • We think shares look undervalued, as investors underestimate Pfizer’s ability to stabilize and then grow revenue beyond the 2027-28 patent cliff.

Long view: Management expects Pfizer’s top line to grow at a high-single-digit rate in 2028-33, after patent losses for oncology drug Ibrance (2027) and cardiovascular drug Eliquis (2028).

  • Longer US Vyndamax protection (settlements extend this to mid-2031) and launches in oncology and obesity are likely to keep Pfizer’s growth in positive territory after the coming wave of patent expirations, although we model low-single-digit growth in the 2028-33 timeframe.
  • Multi-billion-dollar target markets for berobenatide (GLP-1 from Metsera) and PF’4404 (PD-1/VEGF bispecific from 3SBio) mean that upcoming data could provide upside to our estimates, and Pfizer retains $7 billion in capacity for additional business development deals to support the pipeline.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

Sponsor Center