Will the Depressed Stock Experience a Rebound by 2025?
In the year 2022, Pfizer, famously known as PFE (-0.17%), became the first healthcare company to surpass the $100 billion annual sales mark. However, following this impressive feat, the company's financial performance and stock price took a tumble. Despite making strides in clinical and regulatory aspects through acquisitions and internal programs, Pfizer continues to struggle to halt the financial decline.
Could 2025 be the turning point for this drugmaking giant? Let's delve into the possibilities.
Is Financial Progress on the Horizon?
Pfizer's financial struggles began due to its inability to sustain the financial performances from its earlier pandemic years. While the company has made improvements, particularly in revenue growth, in the second and third quarters of 2022, it's questionable whether these advances will be enough to satiate the investors.
Pfizer's revenue guidance for 2025 remains somewhat underwhelming, with the company projected to bring in between $61 billion and $64 billion. This projection essentially implies that 2025's revenue will remain largely stagnant compared to 2024, according to the company's own forecast.
The encouraging news is that Pfizer projects its adjusted EPS for 2025 to fall within a range of $2.80 to $3, marking a 10% to 18% increase compared to 2024. However, this financial growth may not significantly propel the stock price unless Pfizer significantly surpasses these projections or fails to meet them, which could further slide the share price.
Pipeline Progress Unveiled
Clinical and regulatory progress can significantly influence a drugmaker's stock price. Although Pfizer has scored several approvals in the past couple of years, the promising new products have not generated over-the-top sales. Could this change in 2025?
The company's efforts in the weight loss market could potentially yield substantial rewards. Pfizer is working on developing danuglipron, a daily oral weight management medicine. Currently in phase 1 studies, the investigational therapy shows potential, particularly as the anti-obesity market is currently experiencing a significant boom.
The growth in this market has been primarily driven by weekly injection treatments. If danuglipron delivers promising results, it could positively influence Pfizer's stock performance, given the escalating demand for oral options in this sector.
The Big Question
While Pfizer may not perform exceptionally well in 2025, its future – particularly in the long term – seems promising. Its efforts to diversify its pipeline, optimize costs, and develop new products ensure the company's sustainability. Its strong dividend stock status, offering a yield of 6.5% (much higher than the S&P 500's average of 1.3%), makes it an appealing pick for investors with a long-term investment horizon.
However, Pfizer may not intrigue growth-oriented investors or those with a short-term investment outlook. Yet, for investors seeking long-term, blue-chip dividend payers, Pfizer should undoubtedly be considered.
In order to turn its financial fortunes around, Pfizer is actively investigating new avenues for revenue growth, such as its weight loss drug danuglipron, currently in phase 1 studies. As investors continue to monitor Pfizer's financial progress, the success of danuglipron could significantly impact the company's stock price, given the surge in demand for oral weight management solutions.
Despite the company's projected revenue remaining fairly stagnant for 2025, Pfizer's projected adjusted EPS for the same year indicates a potential increase of 10-18%, which could potentially attract investments if the company successfully surpasses these projected earnings.
