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Special Report Why Wall Street Gave Up on Pfizer—and Why That May Be a MistakeBy Jeffrey Neal Johnson. Originally Published: 12/31/2025. 
What You Need to Know - Pfizer trades at a historic discount compared to its peers while paying a dividend yield that significantly outperforms the broader market average.
- Strategic acquisitions have established a robust pipeline of next-generation cancer treatments, which are driving growth.
- Management has aggressively re-entered the weight-loss market with new assets, including one that offers a convenient monthly dosing schedule for patients.
The market of 2025 will be remembered for its extremes. While investors poured billions into technology sector giants and companies manufacturing weight-loss drugs, traditional pharmaceutical leaders were left in the cold. Nowhere is this more evident than with Pfizer Inc. (NYSE: PFE). Trading near multi-year lows around $25, the company finishes the year as one of the most unloved assets in the S&P 500. To the casual observer, the pessimism may seem justified: the firm has spent the last two years battling a perfect storm. Imagine a bull market so powerful, every single investor became a millionaire. Not by finding the next NVIDIA or Bitcoin, but by owning a simple index fund.
It sounds impossible. Yet it happened – just a short time ago. Now a legendary figure says: "Brace yourselves. It's about to happen here, in America. But fair warning – it could be the worst thing that ever happens to you."
This story has received little coverage in the press. But if history repeats, it could bump tens of millions of Americans into a 7-figure net worth practically overnight. Click here for the full story. Revenue from COVID-19 products disappeared faster than anticipated, high-profile pipeline candidates failed in clinical trials, and activist investors launched a public campaign against management. But smart investing often requires venturing where others refuse to go. With activist investor Starboard Value exiting in November and management resetting guidance to realistic levels, much of the bad news appears to be priced in. That likely means Pfizer's stock price has found a floor. As we enter 2026, Pfizer presents a rare scenario: a blue-chip company trading at a distressed price, offering a robust dividend yield while it quietly rebuilds its future. The Mathematical Case: Why the Price Is Wrong For value investors, the argument for Pfizer is straightforward. The market is currently pricing the company as if its earnings will permanently shrink, creating a wide disconnect between the share price and the company's actual cash-generation potential. A Historic Valuation Gap Pfizer currently trades at a forward price-to-earnings ratio (P/E) of roughly 8.6x. By comparison, the average company in the pharmaceutical sector trades at 15x to 20x earnings, and high-growth peers such as Eli Lilly (NYSE: LLY) command substantially higher multiples. When a company trades at 8.6x, the market is effectively pricing in little to no growth. That creates a low bar for positive surprises. Pfizer does not need a miracle to see its stock rise; it only needs to demonstrate stability or modest growth. Any earnings beat could prompt multiple expansion as the stock reverts toward industry norms. The Dividend Shield While investors wait for a repricing, they are compensated to hold the stock. - Annual payout: $1.72 per share.
- Current yield: Approximately 6.9%.
This yield is nearly four times the S&P 500 average and acts as a margin of safety. Even if the share price remains flat through 2026, a near-7% dividend provides a baseline return that outperforms most savings accounts and many government bonds. Management is protecting that dividend via a $4 billion cost-savings plan. By trimming administrative bloat and optimizing manufacturing, the company aims to preserve the cash flow needed to keep those quarterly checks flowing. The New Foundation: Oncology Takes the Lead The biggest criticism leveled at Pfizer is the growth gap left by the end of its COVID business. To close that gap, the company has pivoted aggressively toward oncology. The Guided-Missile Technology The crown jewel of Pfizer's 2023 Seagen acquisition is its leadership in Antibody-Drug Conjugates (ADCs). Traditional chemotherapy is like a wide blast that harms both healthy and cancerous cells; ADCs behave more like guided missiles. They target specific cancer cells and deliver a toxic payload directly, sparing healthy tissue. This technology is already generating results. The Seagen portfolio contributed roughly $3.4 billion in revenue in 2024 and accounted for about $2.75 billion in the first three quarters of 2024, driven by strong sales of Padcev for bladder cancer. Navigating the Bumps The path hasn't been without setbacks. In December 2025, the company reported a safety signal involving Hympavzi during a trial extension, which temporarily rattled the stock. While such events are concerning, they do not derail the larger thesis: Pfizer's oncology portfolio is deep, with more than 60 programs in development. The company has also strengthened its pipeline by licensing a promising bispecific antibody from 3SBio, underscoring an active effort to replenish future blockbusters. Catching Up: The Strategy for Weight Loss Early in 2025, Wall Street largely wrote Pfizer off in the lucrative weight-loss drug market after its oral candidate, danuglipron, failed to advance. But abandoning the biggest medical trend of the decade was never likely. In late 2025, Pfizer bought its way back into the race through two strategic deals. The Injectable Strategy (Metsera) In November, Pfizer acquired Metsera for about $7 billion. The deal gives Pfizer an ownership stake in a next-generation injectable (MET-097i) that may be administered monthly rather than weekly — a meaningful convenience advantage for patients. The Oral Strategy (YaoPharma) Recognizing that some patients prefer pills to injections, Pfizer also licensed a small-molecule GLP-1 candidate from YaoPharma, putting an oral option back on the table. Why This Matters Current market pricing assigns virtually no value to Pfizer's obesity pipeline. That presents a free option for investors: with expectations at rock bottom, any clinical progress from the Metsera or YaoPharma assets could be pure upside. Pfizer doesn't need to dominate the market; it simply needs to capture a slice of what could become a $100 billion category. The Risk/Reward Equation: 2026 Belongs to Value Pfizer enters 2026 as a company in transition but one with a fortified balance sheet. Management has established a revenue floor of roughly $61 billion for 2026 — a realistic target that removes much of the uncertainty that plagued the stock. For investors, the math is straightforward. At about $25 per share, downside risk is cushioned by a strong dividend and historically low valuation. The upside could be significant: continued growth in oncology or clinical progress in the obesity programs could trigger a sharp re-rating. Unloved stocks in one year can become standout performers the next. With the activist saga resolved and the balance sheet stabilized, Pfizer has moved from a falling knife to a potential cornerstone for value-oriented portfolios. 2026 may be the year the sleeping giant finally awakens.
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