Buy Pfizer (PFE) Stock for a Rebound After Crushing Q1 EPS Expectations?

Pfizer PFE shares spiked +3% in Tuesday’s trading session as the pharmaceutical giant was able to crush its Q1 earnings expectations this morning. Still, Pfizer stock has fallen 10% year to date and hasn’t provided the defensive hedge that many of its Zacks Large Cap Pharmaceutical peers have been able to provide, such as AbbVie ABBV, Eli Lilly LLY, and Johnson & Johnson JNJ.That said, investors may be eyeing Pfizer stock for a continued rebound with PFE still trading near multi-year lows of $20 a share.   Image Source: Zacks Investment Research Pfizer’s Q1 Results Navigating what it called a dynamic operating environment, Pfizer posted Q1 earnings of $0.92 per share, crushing EPS expectations of $0.64 by 43% and rising from $0.82 a share in the prior year quarter. Pfizer also highlighted that it’s on track to exceed its net cost savings targets. This comes as Pfizer has experienced declining revenue from COVID-related products along with discouraging clinical results for its weight loss drug, which would help the company compete with Eli Lilly and Novo Nordisk NVO.  Posting mixed results, Pfizer’s Q1 sales of $13.71 billion missed estimates of $13.83 billion and were down from $14.87 billion a year ago. However, it's noteworthy that Pfizer has exceeded the Zacks EPS Consensus for 11 consecutive quarters with a very impressive average earnings surprise of 43.48% in its last four quarterly reports.  Image Source: Zacks Investment Research Pfizer Reaffirms Its Full-Year Guidance Reassuringly, Pfizer reaffirmed its full-year fiscal 2025 guidance, including revenues in the range of $61 billion-$64 billion, with Zacks projections currently at $63.48 billion. Pfizer still expects adjusted FY25 EPS at $2.80-$3.00, with the Zacks Consensus at $2.99. Pfizer’s “Cheap” P/E Valuation  Most appealing to long-term investors is that Pfizer stock is trading near its decade-long low in terms of price to forward earnings at 7.7X and well below the high of 20.1X during this period. PFE also trades at a noticeable discount to the benchmark S&P 500’s 21.3X forward earnings multiple and its Zacks industry average of 16.4X.Image Source: Zacks Investment Research Pfizer’s Enticing Dividend At current levels, Pfizer’s annual dividend also stands out with a 7.46% yield that towers over its industry’s 2.51% average and the benchmark’s 1.33%. Although Pfizer lost its status as a dividend aristocrat during the 2008 financial crisis, the company has now increased its dividend for 16 consecutive years.Image Source: Zacks Investment Research Conclusion & Final Thoughts Following its Q1 report, Pfizer stock sports a Zacks Rank #2 (Buy). Corresponding with such, earnings estimate revisions for FY25 and FY26 are up over the last 30 days, and this trend could continue with Pfizer blowing away EPS expectations while highlighting its cost-saving initiatives. This would certainly bolster Pfizer’s “cheap” P/E valuation and may lead to an extended rally as PFE does appear to offer long-term value to shareholders, considering its enticing dividend.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pfizer Inc. (PFE): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks