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This Month's Bonus News Why Wall Street Gave Up on Pfizer—and Why That May Be a MistakeWritten by Jeffrey Neal Johnson. Published: 12/31/2025. 
Article Highlights - 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 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. For the casual observer, the pessimism seems justified. The firm has spent the last two years battling a perfect storm: revenue from COVID-19 products evaporated faster than expected, high-profile pipeline candidates failed in trials, and activist investors waged a public campaign against management. Bitcoin just dipped, and while most people are staring at the price, they're missing the real opportunity — this pullback could be the best setup all year for a simple, low-cost strategy that generates steady weekly income without buying crypto, opening an exchange account, or trading options. It uses a small position available in most brokerage accounts, and it's designed to deliver reliable Thursday payouts, even in volatile markets, making this moment especially important for income-focused investors. Watch my Bitcoin Income Briefing here But smart investing often means looking where others won't. With activist Starboard Value exiting in November and financial guidance reset to more realistic levels, the worst now appears to be behind Pfizer. The bad news is out; Pfizer's stock price has likely found a floor. As we enter 2026, the company presents a rare scenario: a blue-chip trading at distressed levels, offering a solid dividend yield while quietly rebuilding its pipeline and long-term growth prospects. The Mathematical Case: Why the Price Is Wrong For value investors, the case for Pfizer is straightforward arithmetic. The market is pricing the company as if earnings will permanently shrink, creating a big disconnect between the share price and the company's cash-generating capacity. A Historic Valuation Gap Pfizer currently trades at a forward price-to-earnings ratio (P/E) of roughly 8.6x. By comparison, the average pharmaceutical firm trades at 15x–20x earnings, and high-growth peers such as Eli Lilly (NYSE: LLY) command much higher multiples. A P/E near 8.6x implies the market expects no growth. That sets a low bar: Pfizer doesn't need a miracle to see its stock rebound—just evidence that its business is stable. Any positive earnings surprise could trigger multiple expansion as the stock re-rates toward industry norms. The Dividend Shield While investors wait for repricing, they are paid 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 serves as a meaningful margin of safety. Even if the share price remains flat through 2026, a ~7% dividend return beats most savings accounts and government bonds. Management is protecting this payout with a $4 billion cost-savings plan. By cutting administrative bloat and optimizing manufacturing, they are preserving the cash flow needed to keep quarterly dividends sustainable. The New Foundation: Oncology Takes the Lead One of the biggest criticisms of Pfizer has been the growth gap left by the end of COVID-related revenues. To plug that gap, the company has pivoted aggressively toward oncology. The Guided-Missile Approach The crown jewel of Pfizer's 2023 Seagen acquisition is its leadership in Antibody-Drug Conjugates (ADCs). Traditional chemotherapy is a wide blast that can damage healthy tissue; ADCs act more like guided missiles, identifying cancer cells and delivering a toxic payload directly. The Seagen portfolio is already contributing meaningfully: it added roughly $3.4 billion in revenue in 2024 and earlier delivered $2.75 billion in the first three quarters of 2023, driven by strong Padcev sales for bladder cancer. Navigating the Bumps The path hasn't been without setbacks. In December 2025, Pfizer reported a safety signal related to Hympavzi, a hemophilia treatment, after a patient death in a trial extension. That news caused a temporary market reaction, but it does not derail the broader thesis. Pfizer's oncology pipeline remains deep—more than 60 programs in development—and management recently licensed a promising bispecific antibody from 3SBio, reinforcing efforts to replenish the pipeline with potential blockbusters. Catching Up: The Strategy for Weight Loss Wall Street largely wrote Pfizer off early in 2025 after Danuglipron, its internal weight-loss pill candidate, failed to progress. But abandoning the biggest medical trend of the decade wasn't an option. In late 2025, Pfizer bought its way back into the race with two strategic deals. The Injectable Strategy (Metsera) In November, Pfizer completed the acquisition of Metsera for about $7 billion, gaining ownership of MET-097i, a next-generation injectable. Unlike several market leaders that require weekly injections, this candidate could be administered monthly—an important convenience advantage for patients. The Oral Strategy (YaoPharma) Recognizing that some patients prefer pills, Pfizer also signed a licensing agreement with YaoPharma for a small-molecule GLP-1 candidate, adding an oral option to its portfolio. Why This Matters The market currently appears to assign little to no value to Pfizer's obesity pipeline, effectively giving investors a free call option. With expectations at rock bottom, any clinical upside from the Metsera or YaoPharma assets would be pure incremental value. Pfizer does not need to be first to market; it simply needs to claim a slice of a market some estimate could reach $100 billion. The Risk/Reward Equation: 2026 Belongs to Value As 2026 begins, Pfizer looks like a company in transition but with a fortified balance sheet. Management has set a revenue floor of about $61 billion for 2026—a practical target that reduces uncertainty. For investors, the math is straightforward. At roughly $25 per share, downside is cushioned by a healthy dividend and a historically low valuation. The upside is substantial: if oncology continues to scale or the new weight-loss assets prove effective, the stock could re-rate sharply. The unloved stocks of one year often become the market darlings of the next. With the activist drama behind it and cash flow stabilized, Pfizer has moved from a falling knife to a potential foundation holding for value-oriented portfolios. 2026 may well be the year the sleeping giant wakes up.
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