In 2022, pharmaceutical giant Pfizer (PFE -2.37%) became the first healthcare company to generate $100 billion in annual sales. But since that notable achievement, its financial results have fallen off a cliff, as has its stock price. Pfizer has made progress, especially on the clinical and regulatory fronts, through acquisitions and internally developed programs. But nothing has stopped the bleeding — yet.
Could 2025 be different? Let’s see whether the drugmaker can finally turn things around this year.
Will financial results be a catalyst?
Pfizer’s woes started because it couldn’t keep delivering the kinds of financial results it did during the earlier pandemic years, or even anything close to that. If the drugmaker can at least consistently grow its revenue and earnings at a good clip, that might lead more investors to buy the stock at current levels.
It’s made some improvements along those lines this year. In the second and third quarters, after not doing so for several periods in a row, the company’s top line moved in the right direction:
PFE Operating Revenue (Quarterly YoY Growth) data by YCharts.
However, Pfizer’s revenue guidance for 2025 doesn’t look particularly exciting. The company expects its top line to come in between $61 billion and $64 billion — the same projection it made for the full fiscal year 2024. In other words, 2025 revenue will stay more or less flat compared to 2024, based on the company’s own guidance.
The good news is that Pfizer is projecting its adjusted earnings per share for 2025 to be in the range of $2.80 to $3, growing between 10% and 18% compared to 2024. Still, based on its guidance, those financial results won’t help the stock rise significantly this year unless Pfizer meaningfully beats its projections. And if it fails to live up to them, the share price will drop even more.
Looking at potential pipeline progress
Clinical and regulatory progress can jolt a drugmaker’s stock price. That hasn’t exactly happened for Pfizer in the past couple of years, despite the many approvals it won, because none of its new products will generate life-changing sales. Could that change in 2025?
If it does, it might be because of Pfizer’s work in the weight loss market. The drugmaker is developing danuglipron, a potential once-daily oral weight management medicine. Danuglipron is currently in phase 1 studies (previous versions of the drug went as far as phase 2 trials), and Pfizer could report data this year.
If the investigational therapy does well — even in just a phase 1 study — it could positively affect Pfizer’s stock performance, since the anti-obesity market is currently the hottest in the pharmaceutical industry. The current leading treatments in the weight management market are administered via weekly injections. There is a demand for oral options, something many drugmakers are working on.
Could Pfizer make enough headway along those lines in 2025 to jolt its share price? It’s hard to predict these things, but it’s worth noting that many other drugmakers are also working on potential oral drugs for weight management. Pfizer has a variety of other pipeline candidates, especially in oncology, but investors might not react as positively to progress on these other fronts, since the anti-obesity market looks especially attractive and is growing incredibly fast right now.
The more important question
Pfizer might not perform particularly well this year. Its financial results likely won’t be outstanding, and there’s no guarantee that its more promising pipeline candidates will deliver the kinds of results investors want to see.
That said, the company has been hard at work, slowly but surely setting up a foundation for the future. Eventually, its pipeline progress will likely pan out, especially in oncology. It will be able to replace older products whose sales aren’t growing as fast as they once were. It should also decrease its exposure to the coronavirus market, which, though still contributing meaningfully to its top line, can be somewhat inconsistent.
Lastly, Pfizer is a strong dividend stock. It offers a forward yield of around 6.5% — compared to the S&P 500‘s average of 1.3% — and has grown its payouts by 53.6% in the past decade.
Pfizer hasn’t been attractive to growth-oriented investors, or to those with a short investing time horizon. But those looking for blue-chip dividend payers to buy and hold for five years or more should seriously consider investing in the stock.
