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Further Reading from MarketBeat.com Why Wall Street Gave Up on Pfizer—and Why That May Be a MistakeAuthor: Jeffrey Neal Johnson. First Published: 12/31/2025. 
Summary - 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 making weight-loss drugs, traditional pharmaceutical leaders were mostly left behind. Nowhere is this more evident than with Pfizer Inc. (NYSE: PFE). Trading near multi-year lows around $25, the company finished the year as one of the most unloved assets in the S&P 500. For the casual observer, the pessimism is understandable: the firm has spent the last two years battling a perfect storm. Jeff Brown recently traveled to a ghost town in the middle of an American desert…
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And only one company here in the U.S. can mine this obscure metal. Click here to get the details on this virtual monopoly. Revenue from COVID-19 products evaporated faster than expected, high-profile pipeline candidates stumbled in clinical trials, and activist investors launched a public campaign against management. Still, smart investing often requires venturing where others refuse to go. With activist Starboard Value exiting in November and guidance reset to more realistic levels, the worst of the storm appears to have passed. The bad news is largely priced in, and Pfizer's stock price has likely found a floor. As we enter 2026, Pfizer offers a rare scenario: a blue-chip company trading at a distressed price, paying a solid dividend while it quietly rebuilds its growth runway. The Mathematical Case: Why the Price Looks Wrong For value investors, the case for Pfizer is straightforward. The market is pricing the company as if its earnings will permanently shrink, creating a wide gap between the share price and the company's actual cash-generating potential. A historic valuation gap Pfizer trades at a forward price-to-earnings ratio (P/E) of roughly 8.6x. By comparison, the average pharmaceutical company trades at 15x–20x earnings, and high-growth peers like Eli Lilly (NYSE: LLY) command far higher multiples. A company at 8.6x is effectively being valued with zero growth expectations. That sets a low bar. Pfizer does not need a miracle to see its stock rise; it simply needs to demonstrate stability. Any positive earnings surprise could prompt a multiple expansion as the stock realigns with sector norms. The Dividend Shield While investors wait for repricing, they are paid to hold the shares. - 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 roughly 7% dividend yield provides a baseline return that beats most savings accounts and many government bonds. Management is defending that payout with a $4 billion cost-saving plan. By cutting administrative bloat and optimizing manufacturing, the company is working to preserve the cash flow needed to keep those quarterly checks coming. The New Foundation: Oncology Takes the Lead A common critique of Pfizer is the growth gap left by the decline of its COVID business. To plug that hole, the company has pivoted aggressively toward oncology. Guided‑missile technology The crown jewel of Pfizer's 2023 Seagen acquisition is leadership in Antibody‑Drug Conjugates (ADCs). Traditional chemotherapy is a wide blast that harms both healthy and cancerous cells; ADCs act more like guided missiles, engineered to recognize cancer cells and deliver a toxic payload directly, sparing healthy tissue. This technology is already producing revenue. The Seagen portfolio contributed roughly $3.4 billion in 2024 and delivered $2.75 billion in the first three quarters of 2023, supported by strong Padcev sales for bladder cancer. Navigating the bumps The path has not been entirely smooth. In December 2025, the company reported a safety signal related to Hympavzi — a trial extension included a patient death — which caused a short-term market reaction. But that event does not erase the broader thesis. Pfizer's oncology pipeline is deep, with more than 60 programs in development. The company has also bolstered the pipeline by licensing a promising bispecific antibody from 3SBio, reinforcing its effort to reload with potential blockbusters. Catching Up: The Strategy for Weight Loss Early in 2025, Wall Street largely wrote Pfizer off in the weight‑loss race after its oral candidate Danuglipron failed to advance. Abandoning the biggest medical trend of the decade, however, was never an option. In late 2025, Pfizer bought back into the market with two strategic deals. The injectable strategy (Metsera) In November, Pfizer completed the acquisition of Metsera for about $7 billion. The purchase gave Pfizer immediate ownership of MET‑097i, a next‑generation injectable that could be dosed monthly rather than weekly — a meaningful convenience advantage for patients. The oral strategy (YaoPharma) Recognizing that some patients prefer pills, Pfizer also licensed a small‑molecule GLP‑1 candidate from YaoPharma to pursue an oral option. Why this matters Today's market prices Pfizer's obesity pipeline at roughly zero—an assumption that creates a free option for investors. With expectations at rock bottom, any clinical progress from the Metsera or YaoPharma assets would be pure upside. Pfizer doesn't need to be first; it only needs to capture a share of a market that could reach $100 billion. The Risk/Reward Equation: 2026 Belongs to Value Pfizer enters 2026 as a company in transition, but one with a fortified bottom line. Management has set a revenue floor of about $61 billion for 2026 — a realistic target that removes some of the uncertainty that haunted the stock. For investors the math is simple. At roughly $25 per share, downside is cushioned by a healthy dividend and an already depressed valuation. Upside, however, is substantial: continued oncology growth or promising results from the new weight‑loss candidates could trigger a sharp repricing. The unloved stocks of one year often become the standout performers of the next. With activist pressure easing and the balance sheet stabilized, Pfizer has moved from a falling knife to a potential foundation holding for value‑oriented portfolios. 2026 may be the year the sleeping giant awakens.
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