What’s Next For Pfizer Stock After A Mixed Q1?

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Pfizer stock (NYSE: PFE) recently reported its Q1 results, with revenues missing and earnings exceeding the street estimates. The company reported revenue of $13.7 billion and adjusted earnings of $0.92 per share, compared to the consensus estimates of $14.1 billion and $0.68, respectively. The company reaffirmed its guidance for the full-year.

Since the beginning of the year, PFE stock has underperformed the S&P 500 index, delivering -13% returns compared to the index’s 6% fall. Investor sentiment toward PFE has been negatively impacted by recent developments, such as the discontinuation of its experimental sickle cell disease treatment and two oral pills for obesity, including danuglipron over safety concerns. Now, if you are looking for an upside with a smoother ride than an individual stock, consider the High Quality portfoliowhich has outperformed the S&P, and clocked >91% returns since inception.

Pfizer’s revenue of $13.7 billion in Q1 reflected an 8% y-o-y decline. While Vyndaqel sales surged 33% to $1.5 billion, Paxlovid sales plunged 75% to $491 million. Also, Comirnaty, Pfizer’s Covid-19 vaccine, generated $565 million in sales during the quarter, marking a significant growth from the $354 million revenue recorded in the same period last year. Pfizer’s adjusted net income margin of 38.2% in Q1’25 was much better than the 31.4% in the prior-year quarter. This led to a 12% y-o-y rise in the bottom line to $0.92 during the quarter, despite a decline in the top line.

Looking forward, Pfizer maintained its 2025 outlook of sales to be in the range of $61 billion and $64 billion and adjusted earnings to be in the range of $2.80 and $3.00 per share, versus $63.6 billion top-line and $3.11 bottom line in 2024. The company hasn’t taken into account any tariff related headwinds that may arise in the future. Pfizer has been focused on improving its profitability, and it has increased the cost-savings target to $7.7 billion by the end of this year.

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Although Pfizer posted a mixed Q1, its stock hasn’t seen any significant change post the results announcement. Now, if we look at a slightly longer period, the changes in PFE stock over the recent years have been far from consistent, with annual returns being considerably more volatile than the S&P 500.

In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment around tariffs and escalating trade wars, could PFE face a similar situation as it did in 2023 and 2024 and underperform the S&P over the next 12 months — or will it see a recovery? While we will soon update our model for Pfizer to reflect the latest results, we think PFE stock remains attractive at its current levels. At levels of $23, it is trading at 8x trailing earnings of $2.91 per share, much lower than the stock’s average P/E ratio of 13x over the last five years. Although a modest downward adjustment to the valuation multiple may be warranted to reflect the lack of a solid long-term revenue growth trajectory after the decline in sales of Covid-19 products lately, we believe the current gap remains too wide.

While PFE stock looks undervalued, it is helpful to see how Pfizer’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

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