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Sunday's Exclusive Article Why Wall Street Gave Up on Pfizer—and Why That May Be a MistakeBy Jeffrey Neal Johnson. Date Posted: 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. For the casual observer, the pessimism seems justified: the firm has spent the last two years battling a perfect storm. Against that backdrop, gold is drawing renewed attention. Central banks are accumulating it at record levels, major institutions are raising long-term outlooks, and experienced investors are revisiting its role as a portfolio stabilizer. Not out of fear, but preparation.
A free educational guide explains why gold has historically played a role during inflationary and debt-heavy cycles, and outlines IRS-approved ways Americans can hold physical gold inside a retirement account as part of a long-term strategy. Get the FREE Gold Guide here Revenue from COVID-19 products vanished faster than anticipated, high-profile pipeline candidates failed in clinical trials, and activist investors launched a public campaign against the management team. However, smart investing often requires venturing where others refuse to go. With the exit of activist investor Starboard Value in November and a realistic reset of financial guidance, the worst of the storm appears to be behind the company. The bad news is out, and Pfizer’s stock price has likely found its floor. As we enter 2026, Pfizer presents a rare scenario: a blue-chip company trading at a severely distressed price, offering a solid dividend yield while it quietly rebuilds its future. The Mathematical Case: Why the Price Is Wrong For value investors, the argument for Pfizer is grounded in simple mathematics. The market is pricing the company as if its earnings will permanently shrink, creating a stark disconnect between the share price and the company's actual cash generation. A Historic Valuation Gap Pfizer currently trades at a forward price-to-earnings ratio (P/E) of approximately 8.6x. To understand how affordable this is, compare it with peers: the average company in the pharmaceutical sector trades at a multiple of 15x to 20x earnings, and high-growth competitors like Eli Lilly (NYSE: LLY) trade at substantially higher multiples. When a company trades at 8.6x earnings, the market is essentially saying it has zero expectations for growth. That creates a low bar for success. Pfizer doesn't need a miracle to see its stock recover; it simply needs to prove the business is stable. Any positive earnings surprise could trigger multiple expansion, where the stock price rises as the market brings the company closer to industry averages. The Dividend Shield While investors wait for this repricing, they are paid handsomely 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 stock price remains flat throughout 2026, a nearly 7% dividend yield alone provides a solid baseline return that beats most savings accounts and government bonds. Management is supporting this dividend through a $4 billion cost-saving initiative. By cutting administrative bloat and optimizing manufacturing, they aim to preserve the cash flow needed to keep those quarterly checks clearing. The New Foundation: Oncology Takes the Lead The most common criticism of Pfizer is that it has a growth gap left by the decline of its COVID business. To fill that hole, the company has pivoted aggressively toward oncology. The Guided-Missile Technology The jewel of Pfizer’s 2023 Seagen acquisition is leadership in Antibody-Drug Conjugates (ADCs). Traditional chemotherapy is like a wide blast that damages both healthy and cancerous cells; ADCs are more like guided missiles. They are engineered to identify specific cancer cells and deliver a toxic payload directly, sparing healthy tissue. This technology is already generating results. The Seagen portfolio contributed approximately $3.4 billion in revenue in 2024 and earlier delivered about $2.75 billion in the first three quarters after the acquisition, driven by strong sales of Padcev, for bladder cancer. Navigating the Bumps The path hasn't been perfectly smooth. In December 2025, the company reported a safety signal regarding Hympavzi — including a patient death in a trial extension. While this caused a temporary jitter in the stock, it does not derail the broader thesis. The oncology portfolio is deep, with more than 60 programs in development. The company has also reinforced its pipeline by licensing a promising bispecific antibody from 3SBio, underscoring its ongoing effort to reload the chamber with potential blockbusters. Catching Up: The Strategy for Weight Loss In early 2025, Wall Street largely wrote Pfizer off as a loser in the lucrative weight-loss drug race after its internal pill, Danuglipron, failed to progress. But abandoning the biggest medical trend of the decade was never an option. In late 2025, Pfizer re-entered the field through two strategic deals. The Injectable Strategy (Metsera) In November, Pfizer acquired Metsera for approximately $7 billion. The deal gave them immediate ownership of a next-generation injectable (MET-097i). Unlike current market leaders that require weekly injections, this candidate has the potential to be administered monthly, offering a meaningful convenience advantage for patients. The Oral Strategy (YaoPharma) Recognizing that some patients prefer pills over needles, Pfizer also signed a licensing deal with YaoPharma for a small-molecule GLP-1 candidate. Why This Matters At the current price, Pfizer’s stock effectively reflects zero value for its obesity pipeline. That creates a free option for investors: any clinical success from the Metsera or YaoPharma assets would represent pure upside. Pfizer doesn't need to be first; it just needs to capture a slice of what many predict will be a $100 billion market. The Risk/Reward Equation: 2026 Belongs to Value Pfizer enters the new year as a company in transition, but one with a heavily fortified bottom line. Management has set a revenue floor of approximately $61 billion for 2026 — a realistic, achievable target that removes much of the uncertainty that plagued the stock in prior years. For investors, the equation is straightforward. At $25 per share, downside risk is cushioned by a healthy dividend yield and a valuation already at historic lows. The upside is significant: if the oncology portfolio continues to grow or if the new weight-loss drugs show promise in clinical trials, the stock could see a sharp repricing. The unloved stocks of one year often become the standout performers of the next. With the activist drama concluded and the balance sheet stabilized, Pfizer has moved from a falling knife to a potential foundational holding for value-oriented portfolios. For Pfizer, 2026 may be the year the sleeping giant finally wakes up.
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