Buy, Sell or Hold Pfizer Stock? Key Tips Ahead of Q2 Earnings

Pfizer PFE will report its second-quarter 2025 earnings on Aug. 5, before market open. The Zacks Consensus Estimate for sales and earnings for the second quarter is pegged at $13.78 billion and 58 cents per share, respectively. Estimates for Pfizer’s 2025 earnings have risen from $3.06 to $3.07 per share over the past 30 days.PFE Estimate MovementImage Source: Zacks Investment ResearchPFE’s Earnings Surprise HistoryThe healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 43.49%, on average. In the last reported quarter, the company delivered an earnings surprise of 43.75%, as seen in the chart below.Image Source: Zacks Investment ResearchWhat Does Our Model Say?Pfizer has an Earnings ESP of +1.43% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Factors Shaping PFE’s Upcoming ResultsHigher sales of Pfizer’s products like Vyndaqel family, Padcev, Lorbrena and Nurtec are expected to have offset softer sales of some key products like Prevnar, Xeljanz, Eliquis and Ibrance in the second quarter.The Medicare Part D redesign under the Inflation Reduction Act (IRA) is likely to have impacted U.S. revenues, particularly sales of higher-priced drugs, including Vyndaqel, Ibrance, Xtandi and Xeljanz.Expectations for PFE’s Primary Care SegmentIn Primary Care, alliance revenues and direct sales from Eliquis are likely to have declined due to IRA-driven lower pricing, which will offset the benefit from higher demand. Sales of the key vaccine Prevnar are likely to have declined.The Zacks Consensus Estimate for alliance revenues from Eliquis is $1.95 billion, while our model estimate is $2.03 billion.The Zacks Consensus Estimate for sales of the Prevnar family of vaccines is $1.36 billion, while our model estimates Prevnar family vaccine sales to be $1.31 billion.Pfizer records direct sales and alliance revenues from its partner, BioNTech BNTX, for the COVID-19 vaccine, Comirnaty. Revenues from Pfizer/BioNTech’s COVID vaccine, Comirnaty, rose in the first quarter due to higher revenues in the United States (due to lower expected returns and higher market share) and higher contractual deliveries in some ex-U.S. markets. It remains to be seen if the improvement continued in the second quarter of 2025.However, sales of its antiviral pill for COVID, Paxlovid, are likely to have declined due to lower infection rates.The Zacks Consensus Estimate for direct sales and alliance revenues from Comirnaty is $193.0 million, while that for Paxlovid is $299.0 million.Our estimate for direct sales and alliance revenues from Comirnaty is $196.2 million, while that for Paxlovid is $201.3 million.Among the newer products, while sales of Nurtec ODT/Vydura are likely to have risen, those of RSV vaccine, Abrysvo, are expected to have continued to decline due to limited recommendations for RSV vaccinations issued by the US Advisory Committee on Immunization Practices.Expectations for PFE’s Oncology SegmentIn the Oncology unit, sales of key medicine Ibrance are likely to have been hurt due to continued competitive pressure across markets, generic entry and the IRA impact in the United States. Sales of Xtandi, Lorbrena and Braftovi/Mektovi are likely to have increased.The Zacks Consensus Estimate for Ibrance is $1.05 billion, while our model estimate is $992.2 million.As regards the antibody-drug conjugates or ADCs added from 2023’s Seagen acquisition, competitive pressure in the United States is likely to have hurt sales of Adcetris, while strong demand trends are likely to have benefited Padcev’s sales.The Zacks Consensus Estimate for Padcev is $494.0 million, while our model estimate is $499.2 million.Expectations for PFE’s Specialty Care SegmentIn the Specialty Care unit, while sales of Vyndaqel are likely to have remained strong, driven by continued demand growth, sales of Xeljanz and Enbrel are likely to have declined.The Zacks Consensus Estimate for sales of Vyndaqel/Vyndamax is $1.62 billion, while our model estimates the same to be $1.57 billion.Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Pfizer stock.PFE’s Price Performance & ValuationSo far this year, Pfizer’s stock has declined 7.5% compared with a decrease of 2.9% for the industry.Pfizer Stock PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the shares currently trade at 7.61 forward earnings, lower than 14.30 for the industry and the stock’s 5-year mean of 10.82. The stock is also much cheaper than that of several other large drugmakers like Eli Lilly LLY, Novo Nordisk NVO, AstraZeneca, AbbVie and others.PFE Stock ValuationImage Source: Zacks Investment ResearchInvestment Thesis on PFE StockAfter witnessing possibly its worst slowdown in 2023/2024, the company seems to be gradually making a comeback and entering a transition phase. Though COVID revenues are declining, Pfizer’s non-COVID operational revenues are improving, driven by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen. Pfizer is one of the largest and most successful drugmakers in oncology. The addition of Seagen strengthened its position in oncology.Pfizer faces its share of challenges, including declining sales of its COVID-19 products, U.S. Medicare Part D headwinds, the upcoming loss of exclusivity (LOE) cliff in the 2026-2030 period, uncertainties around tariffs and a volatile macro environment. However, with COVID-related uncertainties diminishing, its revenue volatility is declining. Pfizer’s key drugs like Vyndaqel, Padcev and Eliquis and new and newly acquired products should continue to drive top-line growth.Pfizer expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Pfizer’s significant cost reduction and efforts to improve R&D productivity measures should drive profit growth. Though Pfizer does not expect strong top-line growth over the next three years due to the LOEs, it expects EPS growth.Pfizer’s dividend yield is more than 7%, which is impressive.Stay Invested in PFE StockNo matter how the second-quarter results play out, investors should continue to retain the stock in their portfolio as it appears to have significant upside potential. Its new drugs and a robust pipeline may help navigate the upcoming LOE period.  It will be a great pick for value investors, considering its cheap valuation, and for income investors due to its sky-high dividend yield.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. 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(PFE): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report BioNTech SE Sponsored ADR (BNTX): 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