Buy Pfizer Stock At $24?

Forbes

05-08-2025

Pfizer (NYSE: PFE) has recently reported impressive second-quarter results, with both revenue and earnings exceeding analyst expectations. The company disclosed adjusted earnings of $0.78 per share on $14.65 billion in revenue, surpassing consensus estimates of $0.58 per share and $13.56 billion.
After the positive report, Pfizer also raised its full-year guidance. This development follows a period of underperformance for the stock; as PFE has experienced a -12% return since the beginning of the year, while the S&P 500 has increased by 8%. Investor sentiment has been adversely affected by worries regarding the company's drug pipeline. Nonetheless, we believe PFE stock remains undervalued at its present levels of around $24.
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Pfizer's revenue increased by 10% year-over-year in the second quarter, reaching $14.65 billion. This growth was fueled by robust sales across various key products:
The company's profitability also demonstrated a remarkable improvement, with the adjusted net income margin rising to 30.3%, up from 25.6% in the corresponding quarter last year. This margin expansion, driven by cost-reduction strategies, culminated in a 30% year-over-year increase in the bottom line to $0.78 per share.
Looking forward, Pfizer maintained its 2025 revenue outlook of $61 billion to $64 billion but increased its adjusted earnings guidance by $0.10 per share to a new range of $2.90 to $3.10. The company's continued emphasis on profitability is expected to yield $7.2 billion in cost savings by the conclusion of 2027. Additionally, see – Pfizer's Operating Income Comparison
After the strong Q2 results, Pfizer's stock has experienced a favorable response in trading. However, over an extended period, the stock's annual returns have been erratic and considerably more volatile than the broader S&P 500. Related – Buy or Sell PFE Stock?
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In light of the current uncertain macroeconomic landscape, marked by tariffs and trade tensions, a significant question for investors is whether Pfizer will replicate its underperformance relative to the S&P 500 over the next 12 months, as it did in 2023 and 2024, or if the company is set for a recovery.
As we work on updating our financial model to reflect the most recent results, we maintain that PFE stock remains attractively priced at its current levels. Trading at roughly $24, the stock has a trailing price-to-earnings (P/E) ratio of 8x (based on midpoint earnings of $3.00 per share), which is markedly lower than its five-year average P/E of 13x.
While a slight reduction in the valuation multiple may be warranted to account for the slower long-term revenue growth trajectory following the decrease in COVID-19 product sales, we believe the current valuation gap is still too significant to overlook.
Even though PFE stock appears undervalued, it is beneficial to examine how Pfizer's Peers perform on essential metrics. You will discover other valuable comparisons for companies across various industries at Peer Comparisons.