Pfizer Inc. (PFE)
Our analysis: PFE rated Buy
Buy. Extreme pessimism creates a 17.76% margin of safety to our $30.24 fair value, provided management secures the dividend through the LOE trough.
Bull: Pfizer perfectly executes its post-COVID transition. The Seagen acquisition delivers massive oncology upside, and aggressive cost-cutting expands margins. Strong FCF completely secures the dividend and accelerates deleveraging, driving a re-rating to the $35.49 FCFF DCF valuation.
Dividend Cut Forced by Cash Squeeze: FCF deteriorates further as generic competition accelerates, forcing a dividend cut to service the $64B debt load.
Buy. Despite an aggressive payout ratio and impending patent cliffs, the current $25.68 price overly penalizes the firm. The synthesized fair value of $30.24 implies the market has fully priced in the LOE downside while ignoring terminal pipeline stabilization.
Position sizing playbook →| Market cap | $146.4B | |
|---|---|---|
| Revenue (ttm) | 63.3B | |
| Net income (ttm) | 7.5B | |
| EPS (ttm) | $1.31 | |
| Shares out | 5.7B | |
| P/E (trailing) | 19.6x | |
| P/E (forward) | 9.0x | |
| Dividend | $1.72 (6.70%) | |
| Volume | 38,902,752 | |
| Beta | 0.31 | |
| Price target | $29.3 | +14.1% |
Price
Recent price action with selectable time range.
Financial snapshot
- Revenue (ttm)
- 63.3B
- Net income (ttm)
- 7.5B
- EPS (ttm)
- $1.31
- P/E (trailing)
- 19.6x
- P/E (forward)
- 9.0x
- Market cap
- $146.4B
| Item | P1 | P2 | P3 | P4 | P5 | Trend |
|---|---|---|---|---|---|---|
| Period | 2021-12-31 | 2022-12-31 | 2023-12-31 | 2024-12-31 | 2025-12-31 | Trend |
| Revenue | $81.29B | $101.18B | $59.55B | $63.63B | $62.58B | -6.3% |
| Gross profit | $50.47B | $66.83B | $34.60B | $45.78B | $46.51B | -2.0% |
| Operating income | $20.24B | $37.16B | $4.22B | $14.83B | $15.79B | -6.0% |
| Net income | $21.98B | $31.37B | $2.12B | $8.03B | $7.77B | -22.9% |
| EPS (diluted) | $3.85 | $5.47 | $0.37 | $1.41 | $1.36 | -22.9% |
| EBITDA | $30.79B | $41.03B | $9.56B | $18.13B | $16.78B | -14.1% |
| R&D | $13.83B | $12.38B | $10.87B | $10.93B | $12.05B | -3.4% |
| SG&A | $12.70B | $13.68B | $14.77B | $14.73B | $13.79B | +2.1% |
Fair-value bridge
- Fair value (low)
- $25.1
- Fair value (mid)
- $30.2
- Fair value (high)
- $35.4
- Current price
- $25.7
- Upside to mid
- +17.8%
Valuation models
| Model | Fair value (mid) | Weight |
|---|---|---|
| Forward earnings | $28.00 | 50% |
| FCFF DCF | $35.49 | 30% |
| Ddm | $32.25 | 10% |
| Multi stage moat fade | $23.70 | 10% |
| Discounted earnings | $68.95 | 0% |
| Owner earnings | $70.66 | 0% |
| Reverse DCF | $0.00 | 0% |
| Peg adjusted peer | $0.00 | 0% |
Analyst consensus
Latest news · PFE
Recent company headlines from major financial publishers.
Valuation
- Market cap
- $146.4B
- P/E (trailing)
- 19.6x
- P/E (forward)
- 9.0x
- P/S
- 2.3x
- P/B
- 1.6x
- EV / EBITDA
- 7.8x
Profitability
- Gross margin
- 74.8%
- Operating margin
- 29.9%
- ROE
- 8.3%
- ROA
- 5.7%
- ROIC
- 12.7%
Balance sheet
- Debt / equity
- 0.72
- Current ratio
- 1.25
- Quick ratio
- 0.85
Trading
- Beta
- 0.31
- Volume
- 38,902,752
- Dividend yield
- 6.7%
Scenarios & expected return
Pfizer perfectly executes its post-COVID transition. The Seagen acquisition delivers massive oncology upside, and aggressive cost-cutting expands margins. Strong FCF completely secures the dividend and accelerates deleveraging, driving a re-rating to the $35.49 FCFF DCF valuation.
- Seamless Seagen integration outperforming internal valuation cross-checks.
- Operating margins rapidly recover above 30%.
- Terminal growth exceeds 2.5%.
The company navigates the Eliquis and Ibrance LOE cliff with moderate internal pipeline success. FCF narrowly covers the dividend. The forward earnings model anchors the valuation at $28.00, representing a painful but manageable structural transition.
- Moderate near-term revenue contraction.
- Terminal multiple stabilizes at 14x.
- Dividend is maintained but not grown.
Pipeline delays and fiercer generic competition accelerate revenue erosion beyond cost-cutting capabilities. Squeezed free cash flows combined with the heavy debt burden force a dividend cut, leading to a severe market re-rating and moat fade down to $23.70.
- Severe generic erosion accelerates.
- Cost-cutting fails to offset margin compression.
- Dividend cut implemented to service $64B debt.
Valuation models & bridge
| Model | Weight | FV / share | vs spot | Contribution |
|---|---|---|---|---|
| Forward earnings | 50% | $28.0 | +9.0% | |
| FCFF DCF | 30% | $35.5 | +38.2% | |
| Ddm | 10% | $32.3 | +25.6% | |
| Multi stage moat fade | 10% | $23.7 | -7.7% | |
| Discounted earnings | 0% | $69.0 | +168.5% | |
| Owner earnings | 0% | $70.7 | +175.2% | |
| Reverse DCF | 0% | $0.00 | -100.0% | |
| Peg adjusted peer | 0% | $0.00 | -100.0% | |
| Composite FV (weighted) | 100% | $30.2 | +17.8% |
Sensitivity: Ke × terminal growth
| Ke ↓ / g → | 1.0% | 1.5% | 2.0% | 2.5% | 3.0% |
|---|---|---|---|---|---|
| 4.9% | $35.2 | $40.5 | $47.5 | $49.0 | $49.0 |
| 5.9% | $28.0 | $31.2 | $35.2 | $40.5 | $47.5 |
| 6.9% | $23.2 | $25.4 | $28.0 | $31.2 | $35.2 |
| 7.9% | $19.9 | $21.4 | $23.2 | $25.4 | $28.0 |
| 8.9% | $17.3 | $18.5 | $19.9 | $21.4 | $23.2 |
Scorecard
| Category | Weight | Score | Reading |
|---|---|---|---|
| Valuation | 11% | 5.0 | |
| Management | 11% | 7.7 | |
| Balance Sheet | 11% | 6.0 | |
| Profitability | 11% | 5.5 | |
| Revenue Growth | 11% | 6.0 | |
| Risk Assessment | 11% | 7.5 | |
| Competitive Moat | 11% | 6.5 | |
| Earnings Quality | 11% | 6.0 | |
| Capital Efficiency | 11% | 5.0 |
Position sizing & entry playbook
- Trim exposure if FCF materially misses the dividend obligation or if debt servicing forces asset liquidations.
Next earnings
Upcoming earnings date and setup when available.