Pfizer has reaffirmed its guidance for the full year 2024 and provided new projections for 2025. The pharmaceutical giant has set its revenue expectations for 2025 between $61.0 billion and $64.0 billion, with adjusted diluted earnings per share (EPS) anticipated to range from $2.80 to $3.00.
The company has achieved significant cost savings of $4.0 billion through 2024 and expects to save an additional $500 million in 2025. Pfizer’s Manufacturing Optimization Program will deliver further cost efficiencies by late 2025, reflecting the company’s commitment to financial discipline and operational efficiency.
Pfizer’s 2025 revenue guidance suggests a stable performance in COVID-19 product sales compared to 2024, excluding a one-time $1.2 billion revenue from Paxlovid. The company anticipates operational revenue growth to remain flat or increase by up to 5% from the 2024 baseline.
Adjusted Selling, Informational, and Administrative (SI&A) expenses for 2025 are projected to be between $13.3 billion and $14.3 billion, while Research and Development (R&D) expenses are expected to range from $10.7 billion to $11.7 billion.
The guidance also considers a negative impact of $1 billion due to the Inflation Reduction Act (IRA) Part D redesign. Despite these challenges, Pfizer expects year-over-year growth in adjusted diluted EPS between 10% and 18% from the 2024 midpoint, even considering a $0.6 billion impact from generic and biosimilar competition.
Likely Impact of Guidance on Pfizer’s Stock Performance
Pfizer’s reaffirmation of its financial guidance and strategic initiatives is likely to influence its stock performance positively. The company’s focus on cost management and operational growth signals potential for delivering significant shareholder value. Investors may find confidence in Pfizer’s robust pipeline and strategic initiatives, which are expected to support future growth.
The absence of share repurchases for 2024 and 2025, with EPS guidance based on 5.74 billion shares outstanding, indicates a clear strategy to maintain financial stability and growth.
Pfizer’s stock has experienced minor fluctuations, with a recent decrease of 0.39% to $25.48. The stock opened at $25.59 and reached a day low of $25.2218, with a high of $25.74. Over the past year, the stock has ranged from a low of $24.48 to a high of $31.54.
Despite the recent dip, analysts maintain varied ratings, with Morgan Stanley holding an Equal-Weight position, Wells Fargo rating it as Overweight, and B of A Securities upgrading it from Neutral to Buy. Goldman Sachs projects 2025 EPS in the mid-to-high $2 range, with revenues forecasted at $64.9 billion, slightly above consensus estimates.
Analysts Recommend a “Buy” for Pfizer’s stock
Pfizer’s market capitalization is $143.09 billion, with a dividend yield of 6.81%. The stock’s forward P/E ratio is 8.77, indicating potential for growth relative to its trailing P/E ratio of 33.67. Key metrics such as the debt-to-equity ratio of 73.408 and a book value of $16.288 highlight the company’s financial health.
Analysts recommend a “Buy” with a mean target price of $31.99, suggesting a potential upside from current levels. Investors will closely watch Pfizer’s strategic execution and market dynamics, including the impact of the IRA Part D redesign and the sales performance of key products like Paxlovid and Vyndaqel.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
