Goldman Sachs has reiterated its Neutral recommendation on Pfizer Inc. (NYSE:PFE), setting a price target of $26.00 as the pharmaceutical giant contends with significant headwinds from impending patent expirations. Currently, Pfizer’s stock is priced at approximately $26.10, hovering near both this target and close to its 52-week peak of $27.69.
Over recent months, Pfizer shares have exhibited limited price movement, remaining largely confined within a narrow trading range. This contrasts with a broader recovery observed across the pharmaceutical sector. The valuation, trading on a price-to-earnings (P/E) ratio around 8.8 times, stands notably below the median multiple of roughly 14 times seen among comparable U.S. pharmaceutical peers. Data sourced from InvestingPro further supports the view that Pfizer is undervalued with a current P/E of 15.08. Additionally, Pfizer enjoys a strong financial health score of 3.11 designated "GREAT" by InvestingPro.
Yet, the company faces ongoing pressures as it enters the first year of what is expected to be a three-year stretch impacted by patent cliff effects, which are likely to weigh on its revenue stream. Compounding this challenge, Pfizer’s capacity for business development has diminished to $6 billion, and its long-standing dividend growth has stalled for the first time in over 15 years. Nevertheless, Pfizer maintains a robust dividend payment record spanning 56 consecutive years, yielding a notable 6.7% at present.
Revenue forecasts project a 3% contraction in the fiscal year 2025. Correspondingly, nine analysts have recently lowered earnings estimates, underscoring concerns about near-term profitability. Goldman Sachs highlights that any significant rebound in Pfizer’s stock performance is probable to hinge upon clinical developments anticipated in 2026. Investor attention is particularly focused on obesity treatment data, following Pfizer’s strategic acquisition of MTSR, which repositions the company within the competitive obesity therapeutics landscape.
Among key milestones, the release of VESPER-3 monthly trial data has been rescheduled from an initially expected first-quarter disclosure to some time in the first half of 2026. This data release is likely to be a critical catalyst shaping sentiment for Pfizer shares throughout the year. Concurrently, data from the Phase 3 trial evaluating the antibody-drug conjugate (ADC) SV for lung cancer, also slated for the first half of 2026, represents another significant clinical indicator that market participants are monitoring.
Complementing its clinical pipeline activities, Pfizer has engaged in notable partnership agreements. The company recently inked a licensing deal with Novavax to utilize Novavax’s Matrix-M adjuvant technology for vaccine development. This arrangement could be valued up to $530 million, including an upfront payment of $30 million to Novavax and additional milestone payments contingent on future development progress and sales achievements.
In a distinct transaction, Pfizer has agreed to exit its ownership stake in ViiV Healthcare. This move enables Shionogi to elevate its shareholding in the HIV-focused company to 21.7%, while GSK remains the majority stakeholder at 78.3%. This reallocation of equity came through a share issuance to Shionogi amounting to $2.125 billion.
Financial analysis by Bernstein affirms a Market Perform rating on Pfizer with a target price of $30, reflecting a neutral perspective on its market stance. Bernstein highlights Pfizer’s $6 billion funding reserved for prospective investments or strategic developments, underscoring the company’s resources to pursue future growth opportunities.
These data points and strategic maneuvers depict Pfizer’s balanced approach to navigating patent expiry-related revenue pressure while actively pursuing innovation and partnerships to sustain its position in the pharmaceutical industry.