Latest news with #DavidDenton
Yahoo
12-05-2025
- Business
- Yahoo
Wondering if Pfizer's 7.6% Dividend Yield Is Sustainable? Here's What You Need to Know.
Pfizer can cover its dividends with free cash flow, but doesn't have a huge cushion. The company faces some risks from pipeline setbacks, patent expirations, and U.S. government policies. Its dividend appears to be sustainable despite the uncertainties. 10 stocks we like better than Pfizer › Income investors have liked Pfizer (NYSE: PFE) for years. However, the big drugmaker's exceptionally juicy dividend these days has made its stock even more attractive. But when a dividend yield reaches ultrahigh levels, investors can feel a heightened level of uncertainty. Wondering if Pfizer's 7.6% dividend yield is sustainable? Here's what you need to know. Pfizer's management remains confident about the company's ability to fund the dividend. CFO David Denton emphasized on the first-quarter earnings call that "our commitment to [the] dividend is steadfast." As he has in the past, Denton said that Pfizer intends to maintain and grow the dividend over time. However, I don't think income investors should hang their hats on executives' comments. After all, they aren't definitively promising that the company will continue to pay dividends at current levels. Instead, the more pragmatic approach is to examine its financials to determine how sustainable the dividend is. Pfizer's dividend payout ratio of 122.5% looks concerning at first glance. A company can only pay out more in dividends than it generates in earnings for a limited time. Should income investors be worried? I don't think so. A much better financial metric to consider when evaluating the sustainability of the dividend is free cash flow. Pfizer generated free cash flow of around $9.8 billion in 2024. It paid roughly $9.5 billion in dividends last year. This doesn't give the drugmaker a lot of cushion, but it is producing sufficient free cash flow to cover the dividend payments. Importantly, Pfizer expects to achieve cost savings of $7.2 billion by 2027. This should help boost free cash flow and give more flexibility in funding dividends. Does this mean Pfizer's dividend is 100% safe? Unfortunately, no. The company faces several uncertainties that could make it difficult to maintain and grow the dividend. The perennial challenge for drugmakers is the risk of pipeline setbacks. Pfizer recently experienced a highly visible example with safety concerns about danuglipron, which resulted in the company discontinuing development of the experimental weight management pill. Pfizer's financial performance hinges more on its pipeline than some of its peers' do because of multiple patent expirations coming over the next few years. CEO Albert Bourla acknowledged on the Q1 earnings call that the company won't be "a strong top-line growth story for the next three years" due to the loss of exclusivity for several key products. However, he believes Pfizer will be an "EPS [earnings per share] growth story" thanks to its cost reductions, business development, and new product launches. Again, though, Bourla's optimism is warranted only if the pipeline delivers as hoped. The steep tariffs threatened by the Trump administration on pharmaceutical imports could also hurt the company. Bourla said on the Q1 call that his discussions with government officials indicated that the main concern is with "critical medicines" made outside the U.S. Also, President Donald Trump recently told pharmaceutical industry leaders that they would have "a lot of time" to move drug manufacturing to the U.S. before being hit by tariffs. While signs point to Pfizer being able to navigate pharmaceutical tariffs relatively well, there's still a financial risk. A potentially greater worry, though, is the White House's plan to implement international reference pricing for some prescription drugs covered by Medicare. This approach, often referred to as "most favored nation" or MFN pricing, pegs the price Medicare pays for drugs to the lowest price paid by other developed countries. How problematic could MFN pricing be for Pfizer? It depends on the details of what the Trump administration does. The good news is that (based on the latest available data) only one of Pfizer's products (pneumococcal vaccine Prevnar 20) ranks in the top 30 drugs for which Medicare Part B spent the most money. Considering all these factors, I think Pfizer should be able to continue paying dividends at current levels despite the uncertainties it faces. But I wouldn't bet on the drugmaker's dividend yield remaining as high as it is now. A lot of negativity is baked into Pfizer's share price, with the stock trading at less than 8 times forward earnings. The average forward price-to-earnings ratio of around 16.5 for S&P 500 healthcare stocks is more than twice that. Any pleasant surprises -- perhaps pharmaceutical tariffs that don't hurt Pfizer as much as feared -- could boost the company's share price. If the stock rises, its dividend yield will fall. However, income investors shouldn't focus as much on what the future yield might be as they do on what the dividend payments will be. I predict that over the next few years, Pfizer's dividends will continue to be attractive. Before you buy stock in Pfizer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Pfizer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Keith Speights has positions in Pfizer. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy. Wondering if Pfizer's 7.6% Dividend Yield Is Sustainable? Here's What You Need to Know. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-04-2025
- Business
- Yahoo
Pfizer Inc (PFE) Q1 2025 Earnings Call Highlights: Navigating Revenue Decline and Strategic Growth
Revenue: $13.7 billion, a decline of 6% operationally. Diluted EPS: $0.52 per share. Adjusted Diluted EPS: $0.92 per share. Adjusted Gross Margin: Approximately 81%. Total Adjusted Operating Expenses: $5.2 billion, a 12% decline operationally. Adjusted SI&A Expenses: Decreased 12% operationally. Adjusted R&D Expenses: Decreased 12% operationally. Dividend Returned to Shareholders: $2.4 billion. Internal R&D Investment: $2.2 billion. Full-Year 2025 Revenue Guidance: $61.0 to $64.0 billion. Full-Year 2025 Adjusted Diluted EPS Guidance: $2.80 to $3.00. Warning! GuruFocus has detected 6 Warning Signs with PFE. Release Date: April 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Pfizer Inc (NYSE:PFE) reported strong financial performance in Q1 2025, with a focus on improving operating margins and cash flow. The company is advancing its R&D pipeline with multiple anticipated milestones, including regulatory decisions and Phase 3 readouts. Pfizer Inc (NYSE:PFE) is expanding its commercial portfolio, with significant growth in key products like Vyndaqel, Nurtec, and Padcev. The company is committed to maintaining and growing its dividend, reinforcing its capital allocation strategy. Pfizer Inc (NYSE:PFE) is leveraging digital tools and automation to achieve significant cost savings, aiming for $7.7 billion in savings by 2027. Pfizer Inc (NYSE:PFE) experienced a 6% operational revenue decline in Q1 2025, largely due to lower Paxlovid revenues and changes in Medicare Part D design. The company faces challenges from competition in the market, particularly impacting the Vyndaqel family of products. There is uncertainty regarding potential tariffs, which could impact Pfizer Inc (NYSE:PFE)'s financial performance and manufacturing strategy. The discontinuation of the danuglipron program in the obesity portfolio highlights challenges in R&D prioritization. Pfizer Inc (NYSE:PFE) is navigating a complex global landscape with evolving trade and tariff policies, which could affect future operations. Q: Can you reinforce your commitment to maintaining and growing the dividend, especially with tariff uncertainties and potential impacts on cash flows? A: David Denton, CFO, emphasized that the dividend remains a critical component of Pfizer's capital allocation strategy. The company is focused on improving operating margins and cash flow yield to support all capital allocation priorities, including the dividend. Q: What are your expectations for the COVID business this year, considering the nuances around Paxlovid and vaccine sales? A: Aamir Malik, Chief US Commercial Officer, explained that Paxlovid utilization trends closely follow infection rates, with a 50% treatment rate and 80% fulfillment rate. The company expects multiple COVID waves this year and has set up a model to transition Medicare patients to a traditional model. Alexandre De Germay, Chief International Commercial Officer, added that Comirnaty performed well internationally, and Pfizer is preparing for vaccination campaigns in the Southern Hemisphere. Q: What are the key aspects you are looking for in a potential obesity asset, following the discontinuation of danuglipron? A: Chris Boshoff, Chief Scientific Officer, stated that Pfizer remains committed to obesity and is advancing its pipeline of differentiated oral medicines, including a GIPR antagonist in Phase 2. The focus is on tolerability, accessibility, and convenience, with an emphasis on personalized combinations addressing specific diseases associated with obesity. Q: How is Pfizer engaging with the 232 investigation on tariffs, and what is your best sense of timing for more information from the Administration? A: Albert Bourla, CEO, explained that the 232 investigation is focused on national security concerns related to the pharmaceutical supply chain. Pfizer is engaging with the Administration and is cautiously optimistic about the outcome. The investigation is expected to be completed within 270 days, but the Administration may work faster. Q: Can you provide more details on Pfizer's cost realignment program and its impact on 2025? A: David Denton, CFO, mentioned that Pfizer is on track to achieve $4.5 billion in savings by the end of 2025, with an additional $1.2 billion in savings expected by 2027. The focus is on improving productivity and operational efficiency, with some savings realized in 2025 and more in the following years. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Business Mayor
30-04-2025
- Business
- Business Mayor
Pfizer's Irish staff worry about more job losses as drugmaker announces another €1.5bn in cuts
Irish staff of drug giant Pfizer are waiting to hear whether another round of cost-cutting, announced on Tuesday, will mean more job losses at the group's Irish operations. Pfizer said it will cut another $1.7 billion (€1.5 billion) in costs by the end of 2027. This is the third round of cuts announced by the US pharma group in the last three years and brings to $7.7 billion the amount it hopes to save in annual costs. The company said it expected to make additional savings of $1.2 billion by increased use of automation, artificial intelligence and other digital tools. A further $500 million in savings will come from its research and development budget. The new cuts come as the drugmaker struggles to find sources of growth amid declining demand for its vaccine and treatment for Covid-19. Pfizer is expected to lose more than $15 billion in revenue by the end of the decade as top products lose patent protection. A series of multibillion-dollar acquisitions has yet to yield new blockbusters and Pfizer's stable of drugs in development has failed to convince Wall Street, with the company most recently pulling the plug on an experimental pill for obesity. 'Investors are just not excited about the current Pfizer business or the pipeline,' said Mizuho analyst Jared Holz. 'You could argue that nothing that they've done over the past few years has really worked, and to just watch your stock make new multiyear lows, that can't be the endgame here.' The company, which employs some 5,000 people in Ireland, announced last October that it was cutting about 5 per cent of its Irish workforce, with about 210 jobs going across three sites: Grange Castle, West Dublin; Newbridge, Co Kildare; and Ringaskiddy, Co Cork. Read More Attribution Will Make or Break Retail Media It also shed 100 staff from its Newbridge site in late 2023 in response to a global collapse in sales of its Paxlovid Covid antiviral medicine. It is unclear whether the latest cost savings plan with its emphasis on automation will mean further job losses in Ireland. The announcement came alongside publication of the drugmaker's first quarter results, with revenue of $13.7 billion falling short of analysts' $14 billion average estimate. Adjusted earnings were 92 US cents per share. Pfizer is maintaining its 2025 outlook of between $61 billion and $64 billion and adjusted per-share earnings of $2.80 a share to $3 a share. Chief financial officer David Denton said the company is 'trending towards the upper end' of the per-share earnings guidance range. That wasn't enough to encourage investors initially with Pfizer's shares slipping as much as 2.6 per cent after the markets opened in New York. But sentiment improved as the results were digested with the shares trading up 3.4 per cent in early afternoon trade. Mr Denton told analysts on Tuesday that the company is forecasting $150 million in costs this year from the tariffs implemented to date. He said the sum was factored into the company's sales and earnings outlook for the year. Pfizer, which relies on a global network of manufacturing sites to supply drugs to the US, could be significantly affected by Trump's promised tariffs on pharmaceuticals. Chief executive Albert Bourla has said the company could mitigate part of the impact by moving some overseas production into the US. Read More Bord Gáis Energy announces fresh price cuts of up to 10% He said the industry is hoping the Trump administration will focus more on generic medicines like those the World Health Organisation has designated as essential, which tend to be produced mostly in China and India. 'I think that's where the problem is. It's not if an obesity drug is made in Ireland,' he said. Speaking on a conference call with investors, he said the drugmaker's story over the next three years would not be one of strong revenue growth, given looming patent expirations on top products, but rather one of earnings growth. The company's Covid business, which once drove annual revenue to $100 billion, has dramatically faded since the heights of the pandemic. In the first quarter, Covid sales overall dragged on sales. Pfizer's Covid vaccine revenue was $565 million, beating estimates of $325 million. But Paxlovid, the company's pill for Covid, brought in $491 million, far below Wall Street's $902 million forecast. As for other drugs, sales of Eliquis, the company's decade-old blood thinner and one of its top drugs, were $1.92 billion, roughly in line with estimates. The pneumonia vaccine Prevnar added $1.66 billion, meeting analysts' average view. Sales of the heart drug Vyndaqel were $1.49 billion on the quarter, beating estimates of $1.38 billion despite mounting competition from BridgeBio Pharma and Alnylam Pharmaceuticals. – Additional reporting: Bloomberg
Yahoo
29-04-2025
- Business
- Yahoo
Pfizer Shares Rise After Q1 Profit Beats, Reaffirms 2025 Outlook
Pfizer (NYSE:PFE) surged about 3% on Tuesday morning after the drugmaker posted first-quarter results that beat Wall Street's forecasts, driven by aggressive expense reductions. Warning! GuruFocus has detected 6 Warning Signs with PFE. Adjusted earnings per share came in at $0.92, well above the $0.67 FactSet consensus. Revenue for the quarter reached $13.7 billion, just under the $13.9 billion analysts had predicted. The company has trimmed an additional $1.2 billion in costs this year and is on track to cut $4.5 billion by year-end as it seeks to streamline operations while hunting for its next major drug candidate. Management reaffirmed its full-year 2025 outlook, noting that the forecast does not currently include any potential impact related to future tariffs and trade policy changes, which we are unable to predict at this time. CFO David Denton indicated prepared remarks suggest Pfizer is currently trending toward the upper end of its profit guidance range, excluding any trade-related effects. Based on the one year price targets offered by 19 analysts, the average target price for Pfizer is $28.71 with a high estimate of $41.43 and a low estimate of $22.00. The average target implies an upside of 21.18% from the current price of $23.69. Based on GuruFocus estimates, the estimated GF Value for Pfizer Inc in one year is $28.58, suggesting an upside of 20.64% from the current price of $23.69. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
Pfizer Shares Rise After Q1 Profit Beats, Reaffirms 2025 Outlook
Pfizer (NYSE:PFE) surged about 3% on Tuesday morning after the drugmaker posted first-quarter results that beat Wall Street's forecasts, driven by aggressive expense reductions. Warning! GuruFocus has detected 6 Warning Signs with PFE. Adjusted earnings per share came in at $0.92, well above the $0.67 FactSet consensus. Revenue for the quarter reached $13.7 billion, just under the $13.9 billion analysts had predicted. The company has trimmed an additional $1.2 billion in costs this year and is on track to cut $4.5 billion by year-end as it seeks to streamline operations while hunting for its next major drug candidate. Management reaffirmed its full-year 2025 outlook, noting that the forecast does not currently include any potential impact related to future tariffs and trade policy changes, which we are unable to predict at this time. CFO David Denton indicated prepared remarks suggest Pfizer is currently trending toward the upper end of its profit guidance range, excluding any trade-related effects. Based on the one year price targets offered by 19 analysts, the average target price for Pfizer is $28.71 with a high estimate of $41.43 and a low estimate of $22.00. The average target implies an upside of 21.18% from the current price of $23.69. Based on GuruFocus estimates, the estimated GF Value for Pfizer Inc in one year is $28.58, suggesting an upside of 20.64% from the current price of $23.69. This article first appeared on GuruFocus.
