Pfizer (PFE) reported 24Q4 revenues of $17.8 billion, up 24.7% from 23Q4 and 3.4% above my estimate. Sales of Comirnaty were much stronger than expected, but that was mostly offset by lower than projected sales of Paxlovid. GAAP EPS was $0.07, reversing last year’s loss of $0.60 but below my estimate of $0.27 due to unanticipated impairment charges. Non-GAAP EPS of $0.63 exceeded last year’s $0.10 and my estimate of $0.55.
Management’s 2025 guidance calls for revenues of $61-$64 billion. Revenues are stabilizing, net of modest patent expirations, as annual sales of the two COVID-19 treatments become more predictable. Included in the guidance is a net sales headwind of $1 billion due to the IRA’s Medicare Part D redesign. The redesign will cause a hit to sales early on from lower prices (due to the impact of lower catastrophic coverage pricing) that is expected to be offset partially by increasing sales volumes during the course of the year (due to the lowering of the patient out-of-pocket cap). The $1 billion hit equals 1.6% of 2024 sales, so the 2024 baseline is $62.6 billion, roughly the midpoint of 2025 guidance.
Revenue headwinds are expected to be offset partially by higher gross margins and lower selling, informational and administrative expense. A reconfiguration of Pfizer’s global manufacturing footprint should begin delivering savings later in 2025 and mostly in 2026. As a result, management expects 2025 adjusted EPS of $2.80-$3.00, below 2024’s $3.11.
My projections are in line with guidance, I have raised my 2025 GAAP EPS estimate from $2.02 to $2.13, as lower projected sales are more than offset by improved margins. My 2025 non-GAAP estimate is now $3.00, down from $3.05. For 2026, my projections show revenues of $63.6 billion, up 1.9%, GAAP EPS of $2.39 and non-GAAP EPS of $3.20. The 6.7% increase in 2026 adjusted EPS (vs. 2025) is due mostly to continued expected margin improvement.
Since my last report (11/6), Pfizer’s stock has declined 5.7%, a smidge better than the S&P 500’s 6.4% decline but worse than the NYSE ARCA 2.7% decline. The stock has been in a gradual downtrend, except for last week’s sell-off; but it remains above its 11/15 intraday low of $24.48. A break below that low could conceivably spark another significant leg down; but the stock has been forming a wide base, trading between $23.71 and $30.55 since December 2023. This could set the stage for an upside breakout later in 2025 or in 2026.
With the sideways trading, I am maintaining my $33 price target, which now equates to one-year forward multiples of 14.0 times projected 2026 GAAP EPS of $2.39 and 10.2 times projected non-GAAP EPS of $3.20. The non-GAAP multiple of 10.2 is below the peer group average of 13.2. The price target represents a potential total return of 38%, including the stock’s 6.8% dividend yield. Accordingly, I am also maintaining my performance rating of “1” (Buy).
This is a summary of my recent update report on Pfizer Inc. (PFE). To obtain a copy of the report, please reach out to me using the contact information provided below.
March 31, 2025 (Report published on March 30, 2025.)
Stephen P. Percoco
Lark Research
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© 2015-2025 by Stephen P. Percoco, Lark Research. All rights reserved.
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