Pfizer Quarterly Profits Showcased Through Cash Distributions to Shareholders
Pfizer's 2025 Financial Outlook: Modest Growth Amid Challenges
Pfizer Inc. (NYSE: PFE) has reported a strong Q2 performance, beating consensus estimates and raising its 2025 EPS guidance by 10 cents. However, the company's stock price is currently trading at a compressed P/E of ~7.8x based on its 2025 estimated EPS.
The pharmaceutical giant has recently entered into an exclusive global, ex-China, in-licensing agreement with 3SBio, Inc. for the development, manufacturing, and commercialization of SSGJ-707, a bispecific antibody targeting PD-1 and VEGF. SSGJ-707 is currently undergoing clinical trials in China for non-small cell lung cancer, metastatic colorectal cancer, and gynecological tumors.
Despite this promising development, Pfizer faces significant challenges in the coming years. Analysts predict strong EPS growth headwinds due to patent expirations on several key drugs, declining sales of COVID-19 products, U.S. Medicare Part D policy headwinds, and uncertainties related to tariffs and a volatile macroeconomic environment.
Among the drugs facing patent expirations are Eliquis, Vyndaqel, Ibrance, Xeljanz, and Xtandi, which are expected to face generic competition between 2026 and 2030, leading to anticipated revenue erosion. Furthermore, the decline in sales of COVID-19 products, which were previously strong revenue contributors, will also impact Pfizer's bottom line.
To counteract these challenges, Pfizer is focusing its investment and growth on its oncology portfolio and expanding areas like obesity drugs, which forecast high compound annual growth rates. The oncology and other specialty drugs are expected to help offset some revenue losses and contribute to margin expansion.
Pfizer's dividend payout for July 2025 is $0.4300 per share, representing a 2.3% year-over-year increase from the $0.4200 per share dividend paid in 2024. The current dividend yield of Pfizer is ~6.9%, which is substantially above historical averages. However, explicit forecasts or projections for Pfizer’s dividends over the next three years could not be found in the search results.
In a recent article, Pfizer was rated as a sell due to strong EPS headwinds and large uncertainties. Despite the sizable valuation discount and high dividend yield, the author reiterated the sell rating, citing the large uncertainties ahead for Pfizer due to uncertainties in its pipeline drugs and pending patent expirations.
Despite these challenges, Pfizer projects total revenues between $61 billion and $64 billion for 2025, with growth driven primarily by new drugs offsetting declines in COVID-19 product sales. The company expects limited top-line growth over the next three years due to loss of exclusivity on several key products but anticipates some EPS growth.
In conclusion, Pfizer’s financial outlook for the next three fiscal years shows modest revenue growth supported by non-COVID and oncology drugs, raised EPS guidance for 2025, but with expected headwinds from patent expirations, COVID sales decline, and pricing pressures which are weighing on longer-term EPS growth projections. Investors should carefully consider these challenges and potential opportunities when making investment decisions regarding Pfizer Inc. (PFE).
- Pfizer's oncology portfolio and investments in expanding areas like obesity drugs, which forecast high compound annual growth rates, are strategic moves aimed at offsetting revenue losses due to patent expirations.
- Given the declining sales of COVID-19 products and uncertainties related to patent expirations, Pfizer's financial growth projections over the next three years are expected to be modest.
- To navigate these challenges, Pfizer is focusing on investing in its business, particularly in the pharmaceutical sector, and expanding its product portfolio to compensate for the anticipated revenue erosion caused by patent expirations.
