Pfizer (PFE) 25Q2 Update

Pfizer (PFE) reported 25Q2 revenues of $14.7 billion, up 10.3% from 24Q2 and 6.1% above my estimate.  The sales gains were broad based across the company’s commercial portfolio, with the greatest dollar contributions coming from the Vyndaqel family, Comirnaty, Paxlovid, Padcev and Eliquis.  GAAP EPS was $0.51, up from $0.01 in 24Q2 and better than my estimate of $0.39.  Non-GAAP EPS of $0.78 exceeded last year’s $0.60 and my estimate of $0.61.

Management left its 2025 guidance for revenues unchanged at $61-$64 billion, but raised its adjusted (non-GAAP) EPS target by $0.10 to $2.90-$3.10.  The updated earnings guidance anticipates lower adjusted SI&A expenses of $200 million and lower adjusted R&D expenses of $300 million.  However, Pfizer has upped the cost of its restructuring programs by $2.2 billion (on top of its previously announced $3.1 billion).  To date, it has incurred $3.5 billion of costs under the combined programs, with most of the remainder to be spent through 2027.  A separate $1.4 billion program to reconfigure Pfizer’s global manufacturing footprint is aimed at reducing cost of sales.  To date, it has incurred $850 million of its expected total cost under this program, which will begin delivering savings in 25H2 and more in 2026.  The cost of these programs is treated as an exceptional item and therefore excluded in the determination of adjusted EPS.

My updated projections anticipate 2025 GAAP EPS $2.01, up from $1.95.  I have also raised my 2025 non-GAAP estimate to $3.10 from $3.00.  For 2026, my projections anticipate revenues of $63.6 billion, unchanged from my prior report, GAAP EPS of $2.33 (down from $2.37) and non-GAAP Adjusted EPS of $3.16 (vs. $3.20).

Management said that the company is advancing and strengthening its R&D pipeline, striving to maximize the value of its commercial portfolio and making progress in its efforts to expand margins.  It is also engaged with policymakers to navigate the increasingly complicated and rapidly evolving geopolitical environment.

Since my last report (5/30), Pfizer’s stock has risen 5.1%, below the S&P 500’s 7.5% gain but ahead of the 2.8% decline in the NYSE ARCA Pharmaceutical Index ($DRG).  The stock had advanced to an intraday peak of $25.61 on July 10, but it has been struggling to hold on to those gains since then.  It gapped up on the 25Q2 earnings release, closing up 5.2% on the day, but it gave back all of that and more on the following day.  Pharmaceutical stocks have been out of favor due to concerns about tariffs, the threat of international reference pricing and changes at the FDA.

I am maintaining my price target of $33, which equates to 14.0 times projected 2026 GAAP EPS of $2.33 and 10.3 times 2026 non-GAAP EPS of $3.16.  The non-GAAP multiple is below the peer group average of 11.9.  The potential total return is 43%, including the stock’s 7.1% dividend yield, so I am reiterating 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.

August 8, 2025 (Report published on August 7, 2025.)

Stephen P. Percoco
Lark Research
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