Pfizer Down After It Issues Muted 2026 Outlook: How to Play the Stock

Pfizer PFE stock has declined around 3% this week. On Dec. 16, the company announced its financial guidance for 2026, which fell short of investor expectations.Pfizer expects total revenues for 2026 to be between $59.5 billion and $62.5 billion, which represents modest growth from the revised 2025 revenue expectation of around $62 billion (previous guidance: $61-$64 billion) due to lower revenues from COVID products, Comirnaty and Paxlovid, and loss of revenues from the upcoming patent cliff. Some of Pfizer’s major products are due to lose patent protection in the next few years. Revenues from COVID products are expected to be approximately $1.5 billion lower than the expected figure for 2025. Excluding COVID-19 products and the LOE cliff, Pfizer expects operational revenue growth of about 4% in 2026.In 2026, Pfizer expects adjusted earnings per share in the range of $2.80-$3.00, which represents a decline from the 2025 expected range of $3.00 and $3.15 due to the dilutive impact of 3SBio and Metsera deals, lower COVID revenues and higher taxes.The guidance has raised concerns among investors, leading to the big question: Is it the right time to buy PFE shares, or should one book profits? Let’s delve deeper into the company’s fundamentals to better analyze how to play the stock.PFE Enjoys a Strong Position in OncologyPfizer is one of the largest and most successful drugmakers in oncology. The addition of Seagen strengthened its position in oncology.Oncology sales comprise around 28% of its total revenues. Its oncology revenues have risen 7% in the first nine months of 2025, driven by drugs like Xtandi, Lorbrena, the Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer also advanced its oncology clinical pipeline with several candidates entering late-stage development. By 2030, it expects to have eight or more blockbuster oncology medicines in its portfolio.Pfizer is also working on expanding the labels of its approved products (oncology as well as non-oncology) like Padcev, Adcetris, Litfulo, Nurtec, Velsipity and Elrexfio, among others.This year, it in-licensed exclusive global ex-China rights to develop, manufacture and commercialize SSGJ-707, a dual PD-1 and VEGF inhibitor, from China’s 3SBio. Dual PD-1/VEGF inhibitors have been designed to overcome the limitations of single-target cancer therapies and have the potential to become a new standard of care oncology treatment.PFE’s New & Acquired Products Driving Top-Line GrowthPfizer’s dependence on its COVID business has now reduced. 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 (December 2023). Pfizer's recently launched and acquired products rose approximately 9% operationally in the nine months of 2025, with the momentum expected to continue.  Pfizer expects its new and acquired products to deliver double-digit growth in 2026.Pfizer is also trying to rebuild its pipeline through acquisitions. In the first nine months of this year, Pfizer invested approximately $1.6 billion in business development transactions, primarily reflecting the 3SBio licensing deal. In addition, the recent $10 billion Metsera acquisition has brought Pfizer back into the lucrative obesity space after it scrapped the development of danuglipron, a weight-loss pill, earlier this year. The acquisition will add Metsera’s four novel clinical-stage incretin and amylin programs, which are expected to generate billions of dollars in peak sales. However, the Metsera candidates are in early- to mid-stage development and still some years away from commercialization.Earlier this month, Pfizer in-licensed exclusive global rights to develop YP05002, an oral small molecule GLP-1 receptor agonist (GLP-1 RA) for treating obesity from Chinese biotech YaoPharma.Lower Sales of COVID ProductsPfizer is seeing a softness in sales of its COVID products, Comirnaty and Paxlovid, due to lower vaccination rates and COVID infection rates.Changes in recommendations for COVID vaccines may result in lower vaccination rates in certain markets. For instance, in September 2025, the ACIP voted to adopt a “shared clinical decision-making” approach for all FDA-approved COVID-19 vaccines, like Comirnaty. The decision narrowed the recommendation for Comirnaty, reducing the eligible population for the vaccine and hurting its sales in the United States in the third quarter.In 2025, Paxlovid has seen lower demand as a result of lower infection rates. In 2026, Pfizer expects its COVID revenues to be around $5 billion, $1.5 billion less than expected sales of about $6.5 billion in 2025 as COVID infection rates are expected to continue to decline.PFE’s Other HeadwindsPfizer expects a significant negative impact on revenues from the loss of exclusivity (“LOE”) in the 2026-2030 period as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi, face patent expirations. The LOE cliff is expected to hurt sales by approximately $1.5 billion in 2026.Unfavorable impact from the Medicare Part D redesign under the Inflation Reduction Act (IRA) is hurting Pfizer’s revenues in 2025. Higher-priced drugs, including Eliquis, Vyndaqel, Ibrance, Xtandi and Xeljanz, are most affected by the IRA.PFE Stock’s Price, Estimates & ValuationPfizer’s stock has lost 4.9% so far this year against an increase of 16.7% for the industry. The stock has also underperformed the sector and the S&P 500, as seen in the chart below.PFE Stock Underperforms Industry, Sector & S&P 500Image Source: Zacks Investment ResearchFrom a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its five-year mean. Going by the price/earnings ratio, Pfizer’s shares currently trade at 8.04 forward earnings, significantly lower than 17.11 for the industry as well as the stock’s five-year mean of 10.41. The stock is also much cheaper than other large drugmakers like AbbVie ABBV, Novo Nordisk, Eli Lilly LLY, AstraZeneca AZN, J&J and others.PFE Stock ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for earnings has risen from $3.07 per share to $3.12 for 2025, while the same for 2026 has declined from $3.15 per share to $3.07 per share over the past 60 days.PFE Estimate Movement                     Image Source: Zacks Investment ResearchStay Invested in PFE StockPfizer stock has taken a beating for the past three years as its revenues have declined substantially due to lower sales of its COVID products. In addition to COVID-19 product-related uncertainty, Pfizer faces some other challenges, like U.S. Medicare Part D headwinds and the upcoming LOE cliff in the 2026-2030 period.However, Pfizer’s key drugs like Vyndaqel, Padcev and its recently launched and acquired products should help the company largely offset its LOEs over the next several years. Pfizer expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Pfizer’s dividend yield stands at around 7%, which is impressive. The drug pricing agreement with the Trump administration was an important milestone for Pfizer, as it provides longer-term clarity on the company’s strategic investment in innovation and growth.Despite the lukewarm guidance update, we believe investors should continue to retain this Zacks Rank #3 (Hold) stock in their portfolio as Pfizer rebuilds its pipeline in oncology and obesity, which it believes can drive growth from 2029 and beyond. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>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 AstraZeneca PLC (AZN): Free Stock Analysis Report Pfizer Inc. (PFE): 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