Pfizer Earnings: COVID-19 Sales Buoy Results, but Long-Term Outlook Unchanged

Pfizer Stock at a Glance

• Fair Value Estimate: $48
• Star Rating: 4 stars
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide

Pfizer Earnings Update

Pfizer PFE reported first-quarter results ahead of our projections, largely driven by higher-than-expected COVID-19 product sales. While sales of COVID vaccine Comirnaty fell to $3.1 billion, this was above our $2.2 billion estimate, and COVID treatment Paxlovid generated $4.1 billion, well ahead of our $1.6 billion estimate. We had expected a greater work-down in the high levels of inventory for both products.

We are not making any major changes to our fair value estimate, as our projected 2023 COVID product sales are still tracking to a 50%-plus decline as the pandemic eases, followed by expected stable demand for several years. However, management appears to be guiding to much higher Comirnaty and Paxlovid sales in 2024 and beyond. While we view the stock as already undervalued, if management achieves its longer-term COVID sales projection, further upside to our valuation is likely.

Excluding COVID product sales, total sales increased 5% operationally, a trend we expect will continue through 2025. Steady gains for cardiovascular Eliquis (up 7%) and rare-disease drug Vyndaqel (up 16%) should continue based on leading efficacy, but patent losses beginning in 2026 and emerging competition for Vyndaqel are likely to cause declines longer-term. Also, we expect further declines for cancer drug Ibrance (down 5%) based on growing traction from competitive drugs that have shown a stronger survival benefit.

Despite the pressures on Pfizer’s long-term growth, we are encouraged by continued development in the pipeline, which reinforces the firm’s wide moat. We remain most bullish on several near-term launches, including the respiratory syncytial virus vaccine and immunology drugs ritlecitinib and etrasimod. In the intermediate pipeline, midstage data for GLP-1 drugs danuglipron and lotiglipron expected later this year could set the stage for phase 3 studies targeting major competitor blockbusters with an oral convenience benefit.