Pfizer Stock Falls to New 52-Week Low: Should You Buy the Dip?

Pfizer’s PFE stock hit a new 52-week low of $20.92 on Wednesday but recovered thereafter and closed at $22.49Though the stock has seen ups and downs in the past year, the latest price decline is largely due to the global uncertainty caused by the tariff war. With the Trump administration imposing sweeping tariffs, fears of a global recession resulted in a stock market rout worldwide. Though pharmaceuticals have been exempted from tariffs this time around, they could well be Trump’s target in the next round, considering the President’s goal to shift pharmaceutical production back to the United States, mostly from European and Asian countries.Early on Wednesday, Trump said that a “major” tariff on pharmaceutical imports would be announced soon, which hurt Pfizer, Merck, AbbVie ABBV, Eli Lilly LLY and many other drug stocks in the early hours of trading. However, the stocks recovered significantly and closed higher after Trump tweeted about a 90-day pause on reciprocal tariffs for all countries but China.Moreover, stocks of vaccine makers like Pfizer, BioNTech BNTX, Moderna and Novavax have been under pressure since the appointment of Robert F. Kennedy Jr., a well-known vaccine skeptic, as the secretary of Health and Human Services (HHS).Let’s understand the company’s strengths and weaknesses to better analyze how to play PFE’s stock in the backdrop of global uncertainty.Sales of PFE’s COVID Products DecliningWith the end of the pandemic, sales of Pfizer’s COVID products, Comirnaty and Paxlovid, which it developed in partnership with BioNTech, 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 to Drive GrowthThough 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 from Seagen (December 2023). Revenues from Pfizer’s non-COVID products rose 12% operationally in 2024, exceeding the guidance range of 9-11%. Continued growth of Pfizer’s diversified portfolio of drugs, particularly oncology, should support top-line growth in 2025.PFE Enjoys a Strong Position in OncologyPfizer is one of the largest and most successful drugmakers in oncology. The addition of Seagen strengthened its position in oncology. Seagen generated sales of $3.4 billion in 2024, up 38% on a pro-forma basis.Oncology sales comprise around 25% of its total revenues. Its oncology revenues grew 26% on an operational basis in 2024, 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 in 2024, with several candidates entering late-stage development. By 2030, it expects to have eight or more blockbuster oncology medicines in its portfolio.PFE’s Stock Price, Estimates & ValuationPfizer’s stock has declined 13.8% so far this year compared with a decrease of 7.6% for the industry.PFE Stock Underperforms IndustryImage Source: Zacks Investment ResearchFrom 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 7.55 forward earnings, lower than 14.37 for the industry and the stock’s 5-year mean of 11.05. The stock is also much cheaper than other large drugmakers like AbbVie, Novo Nordisk and Lilly.PFE Stock ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for 2025 earnings has risen from $2.95 per share to $2.98 per share, while that for 2026 has decreased from $3.03 to $2.99 per share over the past 60 days.PFE Estimate MovementImage Source: Zacks Investment ResearchStay Invested in PFE StockAfter witnessing possibly its worst slowdown in 2023/2024, the company seems to be gradually making a comeback and entering a transition phase. The last year was a strong one in terms of performance and execution by Pfizer, even though its stock took a hit in 2023 due to a decline in revenues and profits. It saw improved performance of its new products, gained and maintained market share of some of its core brands and made rapid pipeline progress in 2024.Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi will face patent expirations. The Medicare Part D redesign under the Inflation Reduction Act (IRA) is also expected to hurt sales of Pfizer’s higher-priced drugs like Vyndaqel, Ibrance and Xeljanz in 2025.However, with COVID-related uncertainties diminishing, its revenue volatility is declining. Its non-COVID drugs and contribution from new and newly acquired products should continue to drive top-line growth in 2025. Also, Pfizer expects cost cuts and internal restructuring to deliver savings of at least $6.0 billion. Continued growth in non-COVID sales and significant cost-reduction measures should drive profit growth.Pfizer returned $9.5 billion directly to shareholders through dividends in 2024. At its current share price, its dividend yield stands at around 7.6%, which is impressive and way ahead of the industry average, as seen in the chart below.Image Source: Zacks Investment ResearchPfizer has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.With the stock hitting new lows, investors may consider buying it at the present cheap valuation for long-term gains. 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.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pfizer Inc. (PFE): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis Report BioNTech SE Sponsored ADR (BNTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks