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Further Reading from MarketBeat.com Why Wall Street Gave Up on Pfizer—and Why That May Be a MistakeBy Jeffrey Neal Johnson. Date Posted: 12/31/2025. 
Key Points - 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 giants and companies manufacturing weight-loss drugs, traditional pharmaceutical leaders were largely left behind. 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 looks justified: revenue from COVID-19 products faded faster than anticipated, high-profile pipeline candidates failed in clinical trials, and activist investors launched a public campaign against management. Jeff Brown recently traveled to a ghost town in the middle of an American desert…
To investigate what could be the biggest technology story of this decade.
In short, he believes what he's holding in his hand is the key to the $100 trillion AI boom…
And only one company here in the U.S. can mine this obscure metal. Click here to get the details on this virtual monopoly. Still, investing often rewards those willing to look where others refuse to go. With activist Starboard Value exiting in November and guidance reset to more realistic levels, the worst of the storm may be behind Pfizer. The bad news is largely priced in, and Pfizer's stock has likely found a floor. Entering 2026, Pfizer presents a rare scenario: a blue-chip company trading at a distressed price, paying a solid dividend while quietly rebuilding its pipeline. The Mathematical Case: Why the Price Looks Wrong For value investors, the case for Pfizer is straightforward. The market currently values the company as if its earnings will permanently collapse, producing a wide gap between the share price and the company's underlying cash generation. 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 such as Eli Lilly (NYSE: LLY) command substantially higher multiples. A P/E of 8.6x implies the market expects little to no growth. That sets a low bar: Pfizer does not need a miracle to see its stock recover—simply demonstrating business stability or modest growth could trigger multiple expansion as the market re-rates the shares closer to industry norms. The Dividend Shield While investors wait for repricing, the stock pays a meaningful yield: - Annual payout: $1.72 per share.
- Current yield: Approximately 6.9%.
That yield is several times higher than the S&P 500 average and provides a margin of safety. Even if the share price is flat through 2026, a near-7% dividend return beats most savings accounts and many government bonds. Management is supporting the dividend with a $4 billion cost-saving initiative. By trimming administrative bloat and optimizing manufacturing, the company is protecting the cash flow needed to sustain those quarterly payments. The New Foundation: Oncology Takes the Lead One common critique is that Pfizer lacks growth after the decline of its COVID business. Management has responded with an aggressive pivot into oncology. The Guided-Missile Technology The crown jewel of Pfizer's 2023 acquisition of Seagen is leadership in Antibody-Drug Conjugates (ADCs). Conventional chemotherapy is a broad blast that harms healthy as well as cancerous cells; ADCs act like guided missiles, targeting cancer cells and delivering toxic payloads directly, which can reduce collateral damage. This approach is already producing revenue. The Seagen portfolio contributed roughly $3.4 billion in 2024, after delivering about $2.75 billion in the first three quarters of 2023—driven in part 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 involving Hympavzi — a hemophilia treatment — following a patient death in a trial extension. That news rattled the stock briefly, but it does not negate the broader thesis. The oncology pipeline remains deep, with more than 60 programs in development, and the company recently licensed a promising bispecific antibody from 3SBio, reinforcing efforts to reload with potential blockbusters. Catching Up: The Strategy for Weight Loss After its internal oral GLP-1 candidate, Danuglipron, failed to progress in early 2025, many on Wall Street wrote Pfizer off in the weight-loss drug race. Management refused to concede the market and executed a two-pronged strategy in late 2025 to re-enter the space. The Injectable Strategy (Metsera) In November, Pfizer acquired Metsera for roughly $7 billion, gaining MET-097i, a next-generation injectable. Unlike current market leaders that require weekly injections, MET-097i could potentially be dosed monthly—an important convenience advantage. The Oral Strategy (YaoPharma) Recognizing that some patients prefer pills, Pfizer also signed a licensing deal with YaoPharma for a small-molecule GLP-1 candidate, adding an oral option to its portfolio. Why This Matters Pfizer's current share price effectively assigns no value to its obesity pipeline. That creates a free option: because expectations are near rock bottom, any clinical progress with the Metsera or YaoPharma assets would represent pure upside. Pfizer doesn't need to win the whole market—capturing a slice of an estimated $100 billion opportunity would materially boost revenues and investor sentiment. The Risk/Reward Equation: 2026 Belongs to Value Pfizer enters 2026 as a company in transition but with a fortified balance sheet. Management has set a revenue floor of about $61 billion for 2026, a realistic target that reduces near-term uncertainty. At roughly $25 per share, downside risk is cushioned by a healthy dividend and historically low valuation. Upside is meaningful: continued growth in oncology or promising progress in weight-loss candidates could trigger a dramatic re-rating. Unloved stocks one year often become the market darlings the next. With activist pressure eased and the balance sheet stabilized, Pfizer has moved from a falling knife into a potential foundation holding for value-oriented portfolios. For Pfizer, 2026 may be the year the sleeping giant wakes up.
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