Pfizer Faces Challenges but Remains Underrated
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Fool
- Poor Market Performance: Pfizer, with a market cap of $140 billion, has seen its stock price drop over 50% since its 2021 peak, reflecting market concerns about its future, particularly as competitors gain attention with their GLP-1 weight-loss drugs.
- Increased R&D Investment: Despite not launching a GLP-1 drug and facing significant patent expirations, Pfizer is heavily investing in its drug pipeline, particularly in oncology, vaccines, and migraine treatments, demonstrating its commitment to future growth.
- Strategic Adaptability: After dropping its own GLP-1 drug, Pfizer quickly acquired a promising startup and secured a distribution deal with a Chinese company, showcasing its agility and strong market adaptability.
- Long-term Investment Value: Pfizer offers a high dividend yield of 6.7%, with management focused on supporting this dividend during challenging times, suggesting that long-term investors may reap substantial rewards as Pfizer navigates its turnaround.
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Analyst Views on PFE
Wall Street analysts forecast PFE stock price to rise
16 Analyst Rating
5 Buy
11 Hold
0 Sell
Moderate Buy
Current: 25.900
Low
24.00
Averages
28.56
High
35.00
Current: 25.900
Low
24.00
Averages
28.56
High
35.00
About PFE
Pfizer Inc. is a research-based, global biopharmaceutical company. The Company is engaged in the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide. Its Biopharma segment includes the Pfizer U.S. Commercial Division, and the Pfizer International Commercial Division. Its product categories include oncology, primary care and specialty care. Its oncology products include Ibrance, Xtandi, Padcev, Adcetris, Inlyta, Lorbrena, Bosulif, Tukysa, Braftovi, Mektovi, Orgovyx, Elrexfio, Tivdak and Talzenna. Its primary care products include Eliquis, Nurtec ODT/Vydura, Zavzpret, the Prevnar family, Comirnaty, Abrysvo, FSME/IMMUN-TicoVac, Nimenrix, Trumenba, and Paxlovid. Its specialty care products include Xeljanz, Enbrel (outside the United States and Canada), Inflectra, Abrilada, Cibinqo, Litfulo, Eucrisa, Velsipity, the Vyndaqel family, Genotropin, and others. Its PF-08653944 is an ultra-long-acting fully biased GLP-1 receptor agonist.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pfizer's Future Investments and Dividend Analysis
- Dividend Yield: Pfizer's recent dividend yield of 6.7% not only provides investors with a steady cash flow but also attracts long-term investors seeking income, thereby enhancing market interest in its stock.
- Analyst Rating Discrepancies: MarketWatch tracked 28 analyst ratings for Pfizer, with 9 recommending 'buy', 15 suggesting 'hold', and 3 advising 'sell', indicating a cautious market sentiment and an overall consensus to 'hold', reflecting uncertainty about future performance.
- R&D Pipeline Progress: Pfizer has 96 drugs in development, with 31 in late-stage trials, particularly the Mevpro-1 phase 3 trial for metastatic castration-resistant prostate cancer, with results expected in the second half of 2026, which could yield an upside of about $2 per share if successful, showcasing Pfizer's strategic focus in oncology.
- Acquisition and Growth Potential: By acquiring companies like Metsera to bolster its GLP-1 drug development, Pfizer is addressing upcoming patent expirations; despite current challenges, its diverse growth catalysts and robust R&D pipeline support future business growth, highlighting its potential in the weight-loss drug market.
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- Variant Advantage Analysis: The XFG variant, which emerged from the JN.1 variant, is currently one of the dominant COVID strains in the U.S. and internationally, possessing a growth advantage over the previously dominant LP.8.1 variant, indicating the need for timely vaccine updates to address new challenges.
- Vaccine Production Readiness: In briefing documents released ahead of the meeting, the FDA noted that all licensed COVID vaccine manufacturers have indicated their readiness to produce XFG-targeting vaccines in time for the 2026-27 vaccination season, demonstrating the industry's ability to respond quickly to new variants.
- Vaccine Design Recommendations: Based on last year's VRBPAC recommendations, the FDA has advised vaccine manufacturers to design monovalent COVID vaccines targeting JN.1, preferably LP.8.1, to ensure that vaccines are timely updated to respond to the then-dominant strains, enhancing public health response capabilities.
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BridgeBio Pharma Shares Drop After Downgrade by Raymond James
- Downgrade Impact: Raymond James downgraded BridgeBio Pharma (BBIO) from Outperform to Market Perform, primarily due to the anticipated impact of Pfizer's heart drug Vyndamax losing exclusivity, suggesting that BBIO's stock is unlikely to sustain upward momentum amid growing market concerns.
- Increased Competitive Risks: Analyst Martin Auster indicated that with Vyndamax's loss of exclusivity, Attruby's market share could be jeopardized, predicting that new patient starts will become challenging beyond 2031, despite BBIO's efforts to establish a differentiated clinical profile among certain prescribers.
- Market Pressure Expectations: Auster expects that as Vyndamax's exclusivity nears its end, the ATTR-CM therapy market will increasingly rely on formulary-driven dynamics, which may exert greater pressure on TTR stabilizers, potentially undermining BBIO's revenue diversification strategy.
- Price Target Removal: The analyst has removed the $89 price target for BBIO, reflecting a cautious outlook on the company's growth potential, indicating that in a payer-driven market environment, BBIO will need to exert significant efforts to maintain its market position.
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Dow Jones Index Celebrates 130th Anniversary with Key Stock Insights
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- Nvidia's Dividend Surge: On May 20, Nvidia raised its quarterly dividend from $0.01 to $1 per share, a staggering 2400% increase, which, despite a current yield of only 0.5%, attracts investors seeking passive income and indicates a shift towards a more stable earnings model amid surging AI demand.
- Visa's Strong Financial Performance: Despite economic uncertainties, Visa achieved a 9% increase in payment volume in its latest quarter, with valuations at 30 times free cash flow and 29 times earnings, showcasing the resilience of its business model and providing a compelling buying opportunity for investors despite stock price declines.
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- Market Share Expansion: Nvidia has broadened its market share in data centers by delivering new rack-scale solutions, including multi-chip systems to Anthropic, OpenAI, Oracle, and SpaceX on May 18, indicating strong growth potential amid surging AI demand.
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- Procter & Gamble Stability: Procter & Gamble raised its dividend for the 70th consecutive year in April, and despite sluggish volume growth leading to a mere 4.7% stock price increase over five years, its 21 times earnings valuation remains attractive for risk-averse investors.
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Pfizer Faces Patent Expirations and High Dividend Risks
- Patent Expiration Impact: Pfizer's cardiology drugs Eliquis and Vyndaqel are set to lose patent protection in 2028, which is expected to lead to significant revenue declines, exacerbating market pessimism and potentially affecting stock performance.
- Dividend Payment Capability: Despite a high dividend yield of 6.6%, Pfizer's cash flow to dividend ratio hovers around 100%, indicating that the company can utilize cash flow or debt to support dividend payments, although a payout ratio exceeding 100% raises investor concerns.
- Market Comparison Advantage: Pfizer's dividend yield is six times that of the S&P 500 index and significantly higher than the average yields of other pharmaceutical and healthcare companies, providing an attractive proposition for long-term investors despite inherent risks.
- Board Decision Authority: Pfizer's board will ultimately decide on dividend payments, with management signaling support for the dividend; historically, dividends tend to recover quickly after cuts, suggesting potential benefits for long-term investors.
See More
Pfizer's Future Investments and Dividend Analysis
- Dividend Yield: Pfizer's recent dividend yield of 6.7% not only provides investors with a steady cash flow but also attracts long-term investors seeking income, thereby enhancing market interest in its stock.
- Analyst Rating Discrepancies: MarketWatch tracked 28 analyst ratings for Pfizer, with 9 recommending 'buy', 15 suggesting 'hold', and 3 advising 'sell', indicating a cautious market sentiment and an overall consensus to 'hold', reflecting uncertainty about future performance.
- R&D Pipeline Progress: Pfizer has 96 drugs in development, with 31 in late-stage trials, particularly the Mevpro-1 phase 3 trial for metastatic castration-resistant prostate cancer, with results expected in the second half of 2026, which could yield an upside of about $2 per share if successful, showcasing Pfizer's strategic focus in oncology.
- Acquisition and Growth Potential: By acquiring companies like Metsera to bolster its GLP-1 drug development, Pfizer is addressing upcoming patent expirations; despite current challenges, its diverse growth catalysts and robust R&D pipeline support future business growth, highlighting its potential in the weight-loss drug market.
See More
FDA Advisory Panel to Discuss 2026-2027 COVID Vaccine Composition
- Vaccine Target Selection: The FDA's Vaccines and Related Biological Products Advisory Committee will vote this week on whether to select the SARS-CoV-2 subvariant XFG as the target for the 2026-2027 COVID vaccines, a decision that will directly influence future vaccine development directions.
- Variant Advantage Analysis: The XFG variant, which emerged from the JN.1 variant, is currently one of the dominant COVID strains in the U.S. and internationally, possessing a growth advantage over the previously dominant LP.8.1 variant, indicating the need for timely vaccine updates to address new challenges.
- Vaccine Production Readiness: In briefing documents released ahead of the meeting, the FDA noted that all licensed COVID vaccine manufacturers have indicated their readiness to produce XFG-targeting vaccines in time for the 2026-27 vaccination season, demonstrating the industry's ability to respond quickly to new variants.
- Vaccine Design Recommendations: Based on last year's VRBPAC recommendations, the FDA has advised vaccine manufacturers to design monovalent COVID vaccines targeting JN.1, preferably LP.8.1, to ensure that vaccines are timely updated to respond to the then-dominant strains, enhancing public health response capabilities.
See More
BridgeBio Pharma Shares Drop After Downgrade by Raymond James
- Downgrade Impact: Raymond James downgraded BridgeBio Pharma (BBIO) from Outperform to Market Perform, primarily due to the anticipated impact of Pfizer's heart drug Vyndamax losing exclusivity, suggesting that BBIO's stock is unlikely to sustain upward momentum amid growing market concerns.
- Increased Competitive Risks: Analyst Martin Auster indicated that with Vyndamax's loss of exclusivity, Attruby's market share could be jeopardized, predicting that new patient starts will become challenging beyond 2031, despite BBIO's efforts to establish a differentiated clinical profile among certain prescribers.
- Market Pressure Expectations: Auster expects that as Vyndamax's exclusivity nears its end, the ATTR-CM therapy market will increasingly rely on formulary-driven dynamics, which may exert greater pressure on TTR stabilizers, potentially undermining BBIO's revenue diversification strategy.
- Price Target Removal: The analyst has removed the $89 price target for BBIO, reflecting a cautious outlook on the company's growth potential, indicating that in a payer-driven market environment, BBIO will need to exert significant efforts to maintain its market position.
See More
Dow Jones Index Celebrates 130th Anniversary with Key Stock Insights
- Dow Component Changes: Since its establishment in 1896, the Dow Jones Index has seen significant changes in its components, with recent additions like Nvidia and Amazon reflecting economic evolution, shifting investor perception from traditional low-growth stocks to a modern blend of growth and value stocks.
- Nvidia's Dividend Surge: On May 20, Nvidia raised its quarterly dividend from $0.01 to $1 per share, a staggering 2400% increase, which, despite a current yield of only 0.5%, attracts investors seeking passive income and indicates a shift towards a more stable earnings model amid surging AI demand.
- Visa's Strong Financial Performance: Despite economic uncertainties, Visa achieved a 9% increase in payment volume in its latest quarter, with valuations at 30 times free cash flow and 29 times earnings, showcasing the resilience of its business model and providing a compelling buying opportunity for investors despite stock price declines.
- Procter & Gamble's Rising Dividend Yield: Procter & Gamble raised its dividend for the 70th consecutive year in April, with a current yield of 3%, and despite challenges in volume growth, its strong brand portfolio positions it as an ideal choice for risk-averse investors, trading at a P/E of just 21, below its 10-year average of 25.4.
See More
Nvidia Makes Significant Dividend Increase
- Dividend Surge: Nvidia raised its quarterly dividend from $0.01 to $1 per share on May 20, marking a staggering 2,400% increase, which, despite a low yield of 0.5%, makes it more attractive for investors seeking passive income.
- Market Share Expansion: Nvidia has broadened its market share in data centers by delivering new rack-scale solutions, including multi-chip systems to Anthropic, OpenAI, Oracle, and SpaceX on May 18, indicating strong growth potential amid surging AI demand.
- Visa Investment Opportunity: Despite a 6.2% decline in Visa's stock year-to-date, its reasonable valuation at 30 times free cash flow and 29 times earnings presents an excellent buying opportunity, with double-digit revenue and earnings growth reflecting its robust business model.
- Procter & Gamble Stability: Procter & Gamble raised its dividend for the 70th consecutive year in April, and despite sluggish volume growth leading to a mere 4.7% stock price increase over five years, its 21 times earnings valuation remains attractive for risk-averse investors.
See More
Pfizer Faces Patent Expirations and High Dividend Risks
- Patent Expiration Impact: Pfizer's cardiology drugs Eliquis and Vyndaqel are set to lose patent protection in 2028, which is expected to lead to significant revenue declines, exacerbating market pessimism and potentially affecting stock performance.
- Dividend Payment Capability: Despite a high dividend yield of 6.6%, Pfizer's cash flow to dividend ratio hovers around 100%, indicating that the company can utilize cash flow or debt to support dividend payments, although a payout ratio exceeding 100% raises investor concerns.
- Market Comparison Advantage: Pfizer's dividend yield is six times that of the S&P 500 index and significantly higher than the average yields of other pharmaceutical and healthcare companies, providing an attractive proposition for long-term investors despite inherent risks.
- Board Decision Authority: Pfizer's board will ultimately decide on dividend payments, with management signaling support for the dividend; historically, dividends tend to recover quickly after cuts, suggesting potential benefits for long-term investors.
See More
