Pfizer stock (NYSE: PFE) has recently announced its Q1 results, reporting revenues that fell short of expectations while earnings surpassed analyst predictions. The company disclosed revenue of $13.7 billion and adjusted earnings of $0.92 per share, compared to consensus estimates of $14.1 billion and $0.68, respectively. The company reiterated its full-year guidance.
Since the start of the year, PFE stock has lagged behind the S&P 500 index, posting a -13% return versus a 6% decline in the index. Investor sentiment around PFE has been adversely affected by recent events, including the halting of its experimental sickle cell disease treatment and the discontinuation of two obesity medications, including danuglipron, due to safety concerns. If you’re seeking an upside with more stability than an individual stock, consider the High Quality portfolio, which has outperformed the S&P and recorded over 91% returns since its inception.
Pfizer’s revenue of $13.7 billion in Q1 represented an 8% year-over-year decrease. While Vyndaqel sales increased by 33% to $1.5 billion, Paxlovid sales fell by 75% to $491 million. Additionally, Comirnaty, Pfizer’s Covid-19 vaccine, brought in $565 million in sales during the quarter, significantly higher than the $354 million revenue recorded in the same quarter last year. Pfizer’s adjusted net income margin of 38.2% in Q1’25 was substantially better than the 31.4% margin from the prior year’s quarter, resulting in a 12% year-over-year increase in the bottom line to $0.92 for the quarter, despite a decrease in top-line revenue.
Looking ahead, Pfizer has maintained its 2025 sales forecast to be in the range of $61 billion to $64 billion, with adjusted earnings projected between $2.80 and $3.00 per share, compared to $63.6 billion in top-line revenue and $3.11 in net earnings for 2024. The company has not factored in any potential future tariff-related challenges. Pfizer is concentrating on enhancing its profitability, having raised its cost-saving target to $7.7 billion by the conclusion of this year.
Even though Pfizer reported a mixed Q1, its stock has not experienced substantial movement following the announcement of results. When observing a somewhat extended timeframe, the variations in PFE stock over recent years have been inconsistent, with annual returns demonstrating significantly higher volatility than the S&P 500.
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Considering the current uncertain macroeconomic climate surrounding tariffs and escalating trade tensions, could PFE encounter a situation similar to that of 2023 and 2024, and underperform the S&P in the next 12 months — or will it achieve a recovery? While we will soon update our model for Pfizer to incorporate the latest results, we believe PFE stock remains appealing at its current price points. At $23, it trades at 8 times trailing earnings of $2.91 per share, significantly below the stock’s average P/E ratio of 13 times over the past five years. Although a slight downward adjustment to the valuation multiple may be justified to account for the absence of a solid long-term revenue growth path following the recent decline in sales of Covid-19 products, we maintain that the current valuation gap is excessively wide.
While PFE stock appears undervalued, it is beneficial to analyze how Pfizer’s Peers perform based on important metrics. You will discover additional valuable comparisons for companies spanning various sectors at Peer Comparisons.