Should Pfizer Stock Be in Your Portfolio Post a Robust Q4 Performance?

Pfizer’s PFE  fourth-quarter results were strong as it beat estimates for earnings as well as sales. Adjusted earnings per share of 63 cents were much higher than 10 cents in the year-ago quarter. Revenues came in at $17.76 billion, up 22% from the year-ago quarter.Higher sales of Pfizer’s key non-COVID products like Vyndaqel, Padcev and Eliquis and newly acquired products from Seagen, coupled with higher Paxlovid sales, drove the top line in the quarter. However, sales of some key drugs like Prevnar, Xeljanz and Ibrance and new RSV vaccine, Abrysvo, declined in the quarter.The company reaffirmed its financial guidance for 2025, which it had announced in December 2024. Pfizer expects total revenues between $61.0 billion and $64.0 billion. Adjusted earnings per share are expected in the range of $2.80 to $3.00.Overall, it was an uneventful quarter for Pfizer, with the company having already announced its preliminary numbers for the fourth quarter and the financial guidance for 2025 a month before.Let’s understand the company’s strengths and weaknesses to better analyze how to play PFE’s stock in the post-earnings scenario.Sales of PFE’s COVID Products DeclineWith the end of the pandemic, sales of Pfizer’s COVID products, Comirnaty and Paxlovid, have come 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 like Nurtec and those 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.Pfizer’s new products/late-stage pipeline candidates and newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025 to 2030 revenue CAGR to be approximately 6%.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 proforma 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 Performance, Rising Estimates & Attractive ValuationPfizer’s stock has declined 6.9% in the past year compared with a decrease of 1.6% 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 8.70 forward earnings, lower than 16.75 for the industry and the stock’s 5-year mean of 11.18. The stock is also much cheaper than other large drugmakers like AbbVie ABBV, Novo Nordisk NVO and Lilly LLY.PFE Stock ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for 2025 earnings has risen from $2.93 per share to $2.95 per share while that for 2026 has decreased from $3.04 to $3.03 per share over the past seven days.PFE Estimate MovementImage Source: Zacks Investment ResearchStay Invested in PFE StockLast year was a strong year in terms of performance and execution by Pfizer, even though its stock took a hit in 2023 due to the 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 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. Its dividend yield stands at around 6.7%, which is impressive.Those who own this Zacks Rank #3 (Hold) stock may stay invested to see how Pfizer’s new growth drivers perform. Investors with a long-term horizon may consider buying Pfizer’s stock at the present cheap valuation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>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 Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks