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Globe and Mail
2 days ago
- Business
- Globe and Mail
PFE's New & Acquired Drugs Hold Key to Revenue Growth Amid Headwinds
With the end of the pandemic, sales of Pfizer 's PFE COVID products, Comirnaty and Paxlovid, have declined. Though COVID revenues are declining, Pfizer's non-COVID operational revenues improved in 2024 and so far in 2025, driven by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen. Year 2023 was a record year for Pfizer in terms of new drug approvals. It received nine new medicine/vaccine approvals in 2023 that have begun to contribute to top-line growth. In 2024, it gained approval for some interesting new products like two gene therapies for hemophilia, Hympavzi (marstacimab) and Beqvez/Durveqtix (fidanacogene elaparvovec). The December 2023 acquisition of Seagen strengthened Pfizer's position in oncology by adding four antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak. The acquired Seagen products contributed meaningfully to Pfizer's revenues in 2024 and the first quarter of 2025. Seagen also has some next-generation ADC candidates in its pipeline. Pfizer faces its share of challenges, including declining sales of its COVID-19 products, U.S. Medicare Part D headwinds, the upcoming loss of exclusivity cliff, uncertainties around tariffs and a volatile macro environment. However, its new products/late-stage pipeline candidates and newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond. Competition in the Oncology Space Other large players in the oncology space are AstraZeneca AZN, Merck MRK and Bristol-Myers BMY. For AstraZeneca, oncology sales now comprise around 41% of total revenues. Sales in its oncology segment rose 13% in the first quarter of 2025. AstraZeneca's strong oncology performance was driven by medicines such as Tagrisso, Lynparza, Imfinzi, Calquence and Enhertu (in partnership with Daiichi Sankyo). Merck's key oncology medicines are PD-LI inhibitor, Keytruda and PARP inhibitor, Lynparza, which it markets in partnership with AstraZeneca. Keytruda, approved for several types of cancer, alone accounts for around 50% of Merck's pharmaceutical sales. Bristol-Myers' key cancer drug is PD-LI inhibitor, Opdivo, which accounts for around 20% of its total revenues. PFE's Price Performance, Valuation and Estimates Pfizer's stock has declined 4.4% so far this year compared with an increase of 3.1% for the industry. Image Source: Zacks Investment Research From a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the company's shares currently trade at 7.97 forward earnings, lower than 15.54 for the industry and the stock's 5-year mean of 10.91. The Zacks Consensus Estimate for 2025 earnings has risen from $2.98 per share to $3.06 per share, while that for 2026 has gone up from $3.00 to $3.09 per share over the past 60 days. Pfizer has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AstraZeneca PLC (AZN): Free Stock Analysis Report Bristol Myers Squibb Company (BMY): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report
Yahoo
05-06-2025
- Business
- Yahoo
Here Are All 6 Stocks I've Bought Through 5 Months of 2025
President Donald Trump's tariff-induced stock swoon rolled out the red carpet for investors to snag high-quality stocks at a discount. Buying stocks and holding those positions for multiple years is ingrained into my investment philosophy. High-yield dividend stocks, a deeply-discounted legal monopoly, a uniquely-positioned growth stock, and a handful of turnaround candidates were on my buy list through May. 10 stocks we like better than Pfizer › It's been a wild ride for the stock market through the first five months of 2025. As of mid-February, Wall Street's major stock indexes could do no wrong, with the benchmark S&P 500 vaulting to an all-time record-closing high. But over the next two months, tariff-related uncertainty pushed the Nasdaq Composite into its first bear market in three years, and weighed the S&P 500 down to near-bear market territory. Historically, double-digit percentage declines in the major stock indexes represent ideal opportunities for long-term investors to pounce. As of this writing on June 2, I hold 38 positions in my portfolio -- 37 stocks and one exchange-traded fund (ETF) -- and only four of these stakes have been held for less than a year. Buying and holding stocks for years is ingrained into my investment philosophy. With volatility begetting opportunity, here are all six stocks I've bought through the first five months of 2025. One of the new holdings I added to my portfolio this year is pharmaceutical titan Pfizer (NYSE: PFE). The two separate purchases I've made gave me a cost basis of $23.47 per share, which is a penny above where shares closed on June 2. What makes Pfizer so attractive is that it's been punished for its own success. After generating north of $56 billion in combined sales for its COVID-19 vaccine (Comirnaty) and oral therapy (Paxlovid) in 2022, combined sales tumbled to around $11 billion in 2024. But even if these sales fall again in 2025, Pfizer has, collectively, grown its net product revenue by more than 50% over four years. The shortsightedness of select investors is creating a significant buying opportunity for long-term-minded investors. Additionally, Pfizer's oncology segment can be a key growth driver in the years to come. It completed a $43 billion acquisition of cancer-drug developer Seagen in December 2023. This deal added more than $3 billion in immediate sales to Pfizer's oncology portfolio, as well as vastly expanded its pipeline. With Pfizer also targeting billions of dollars in annual cost-savings, a forward price-to-earnings (P/E) ratio of less than 8, coupled with a dividend yield of more than 7%, was too enticing to pass up. The stock I've unquestionably put the most money to work in this year is adtech company PubMatic (NASDAQ: PUBM). I've more than doubled my stake in the company since late February, with a cost basis from shares purchased this year of $9.29. PubMatic is perfectly positioned to take advantage of businesses shifting their ad dollars from print and billboards to digital channels, such as video, mobile, and connected TV (i.e., streaming content). PubMatic's cloud-based programmatic ad platform assists publishers in selling their digital display space. Aside from digital advertising offering sustained double-digit sales growth, PubMatic will benefit from its decision to build out its cloud infrastructure platform. Though it would have been easier to rely on a third party, taking the time to build out this critical infrastructure will now allow PubMatic to hang onto more of its revenue as it scales. This should lead to superior margins, relative to other sell-side providers. Furthermore, PubMatic is swimming with cash. It's been generating positive operating cash flow for a decade and has been aggressively repurchasing its own stock. When backing out its cash position, investors are paying less than $9 per share for a company fully capable of producing more than $1 in earnings per share in a thriving economy. Although the stock market is historically pricey, select value stocks can be found. Satellite-radio operator Sirius XM Holdings (NASDAQ: SIRI) certainly fits the bill. The one add I made to my existing Sirius XM stake came at $19.28 per share on April 4. The great thing about Sirius XM is that it's a legal monopoly. Even though it's still fighting for listeners with traditional radio companies, being the only licensed satellite-radio operator does afford the company some degree of subscription pricing power. Even more important, Sirius XM generates the bulk of its revenue differently than terrestrial and online radio companies. Whereas the latter are heavily reliant on advertising, Sirius XM generates a little over three-quarters of its net sales from subscriptions. When recessions do occur, subscribers are far less likely to cancel their service than businesses are to meaningfully pare back their ad spending. On paper, this makes Sirius XM's operating cash flow far more predictable. Sirius XM's forward P/E of 7, when combined with a dividend yield that's currently above 5%, makes for a tantalizing buy. Semiconductor behemoth Intel (NASDAQ: INTC) is another long-term holding that I chose to add to during President Donald Trump's tariff-induced market swoon. The lone addition was made on April 8 at $18.56. My wager on Intel is that management can eventually turn around a business that was late to the artificial intelligence (AI) party. While Intel's graphics processing units (GPUs) haven't exactly flown off the shelves like Nvidia's hardware, AI is a massive enough addressable market that even latecomers with established brand names can thrive. Despite its GPU tardiness, Intel's central processing units (CPUs) continue to play a key role in high-compute data centers and traditional desktops/laptops. Even with Advanced Micro Devices chipping away at Intel's once monopoly like CPU market share, Intel remains the decisive leader. The robust cash flow generated from its CPU sales can help Intel redirect capital to higher-growth initiatives. While trading in the mid-$18s, Intel stock was also nearing its tangible book value and had fallen 19% below its listed book value, as of the most recent quarter. Though book value is just one of many valuation measures, I believe there are enough levers to pull and long-term catalysts for Intel stock to bounce back. Specialty drugmaker BioMarin Pharmaceutical (NASDAQ: BMRN) is another holding I've purchased for the first time in 2025. My lone purchase occurred on April 8 at a cost basis of $56.01. One of the variables that makes BioMarin such an attractive investment is its focus on ultrarare diseases. Though the clinical success rate in treating rare diseases can be dicey, positive clinical trials can lead to approved therapies that face little or no competition. What's more, insurers rarely push back on high list prices for rare-disease drugs that have no alternatives. BioMarin's shining star for the moment is Voxzogo, a drug used to treat achondroplasia, which is a common type of dwarfism. A combination of strong pricing power and label expansion opportunities should lead to Voxzogo eventually topping $1 billion in annual sales. Further, BioMarin is targeting $4 billion in annual sales by 2027, which would be up from $2.85 billion in reported sales for 2024. Given the exceptionally high margins associated with ultrarare-disease drugs, BioMarin's forward P/E of 10.6, and its projected low-double-digit sales growth rate, make its stock quite the bargain. Last but not least, I added to my existing position in edge cloud-computing company Fastly (NYSE: FSLY) during the Trump tariff tumble. The only addition came on April 4 at a cost of $5.08 per share. Similar to Intel, Fastly is a work in progress that isn't going to right itself overnight. The investment thesis here is that as businesses shift their data and that of their customers online and into the cloud, demand for rapid and secure content delivery network (CDN) services will only increase. Fastly aggressively expanded the capabilities of its CDN following the pandemic. Although not all of Fastly's key performance indicators (KPIs) have moved in the right direction, some of the most important KPIs suggest management is making the right moves. For instance, its revenue retention rate is locked in at 99% or higher, and its enterprise customer count, while a bit volatile, has been chopping its way higher. Perhaps the most exciting number in Fastly's latest quarter is its remaining performance obligation (i.e., its backlog), which surged above $300 million. Considering that Fastly is generating positive operating cash flow, the foundation for future profits has been laid. 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 $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% 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 June 2, 2025 Sean Williams has positions in BioMarin Pharmaceutical, Fastly, Intel, Pfizer, PubMatic, and Sirius XM. The Motley Fool has positions in and recommends Advanced Micro Devices, Fastly, Intel, Nvidia, Pfizer, and PubMatic. The Motley Fool recommends BioMarin Pharmaceutical and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. Here Are All 6 Stocks I've Bought Through 5 Months of 2025 was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
20-05-2025
- Business
- Yahoo
Buy 3 Wide Moat Stocks With Double-Digit Near-Term Upside Potential
The wide moat strategy involves investing in companies that not only lead their industries but are also strategically fortified to maintain dominance in the future. The business models of these companies possess durable competitive advantages that shield them from competitors. This strategy isn't just about short-term gains, but securing a portfolio of stocks that can weather economic storms and continue to deliver stable and predictable returns. This investment strategy focuses on companies with unique strengths such as brand recognition, patent protection, proprietary technology, and network effects. These moats ensure long-term profitability and market leadership, making the companies resilient in volatile markets. Here we recommend three Wide Moat stocks with a favorable Zacks Rank. These stocks have solid short-term price upside potential. The stocks are Pfizer Inc. PFE, The Coca-Cola Co. KO and The Walt Disney Co. DIS. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The chart below shows the price performance of our five picks in the past three months. Image Source: Zacks Investment Research Pfizer is one of the largest and most successful drugmakers in the field of oncology. Its position in oncology was strengthened with the addition of Seagen. This drug generated sales of $3.4 billion in 2024, up 38% on a pro forma basis. PFE has committed significant resources toward the development of treatments in the fields of oncology, internal medicine, immunology and inflammation and vaccines. In 2024, PFE gained approval for some interesting new products like two gene therapies for hemophilia, Hympavzi (marstacimab) and Beqvez/Durveqtix (fidanacogene elaparvovec). PFE expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Continued growth in non-COVID sales and significant cost-reduction measures should drive profit growth. Pfizer has an expected revenue and earnings growth rate of 0.6% and 1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% in the last 30 days. Pfizer presently carries a forward P/E of 7.41X for the current-year, compared with 12.96X for the industry and 19.20X for the S&P 500. PFE currently carries a forward P/S of 2.08X for the current-year, compared with 3.15X for the industry and 2.99X for the S&P 500. It also carries a forward P/B of 1.43X for the current-year, compared with 4.66X for the industry and 3.52X for the S&P 500. The short-term average price target of brokerage firms for the stock represents an increase of 23.7% from the last closing price of $23. The brokerage target price is currently in the range of $23-$33. This indicates a maximum upside of 43.5% and no downside. The Coca-Cola experiences positive business trends, as evidenced by its strong track record of beating expectations. KO has benefited from continued business momentum, aided by higher pricing across markets facing intense inflation and a favorable mix. Coca-Cola's all-weather strategy, combining marketing, innovation, and revenue growth management, supports its vision of a total beverage company and is expected to drive revenue growth in 2025. KO has provided an optimistic view for 2025. Coca-Cola has an expected revenue and earnings growth rate of 2.4% and 2.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same in the last 60 days. KO has a return on equity (ROE) of 45.5% compared with 14.1% for the industry and 16.92% for the S&P 500. The short-term average price target of brokerage firms for the stock represents an increase of 11.1% from the last closing price of $71.93. The brokerage target price is currently in the range of $70-$86. This indicates a maximum upside of 19.6% and a downside of 2.7%. The Walt Disney reported steady second-quarter fiscal 2025 results wherein revenues and earnings increased year-over-year. Domestic Parks & Experiences saw growth at domestic parks, Disney Vacation Club and Disney Cruise Line, partially offset by the decline at international locations including Shanghai Disney Resort and Hong Kong Disneyland Resort. In Entertainment, DIS expects double-digit percentage segment operating income growth in fiscal 2025. ESPN continues to reinforce its position as sports' dominant platform, with the second quarter delivering its most-watched primetime ever and 32% viewership growth in the key 18-49 demographic. DIS has successfully transformed its streaming business from a loss-leader to a profitable growth engine. After reporting its first-ever Direct-to-Consumer (DTC) operating profit in FY2024, the momentum has accelerated in FY2025 with second-quarter DTC operating income reaching $336 million. The Walt Disney has an expected revenue and earnings growth rate of 3.8% and 15.1%, respectively, for the current year (ending September 2025). The Zacks Consensus Estimate for current-year earnings has improved 4.6% in the last 30 days. At present, DIS carries a forward P/E of 19.83X for the current year, compared with 20.37X for the industry and 19.20X for the S&P 500. The short-term average price target of brokerage firms for the stock represents an increase of 10.9% from the last closing price of $112.66. The brokerage target price is currently in the range of $100-$148. This indicates a maximum upside of 31.4% and a downside of 11.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO) : Free Stock Analysis Report Pfizer Inc. (PFE) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research 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
Globe and Mail
20-05-2025
- Business
- Globe and Mail
Buy 3 Wide Moat Stocks With Double-Digit Near-Term Upside Potential
The wide moat strategy involves investing in companies that not only lead their industries but are also strategically fortified to maintain dominance in the future. The business models of these companies possess durable competitive advantages that shield them from competitors. This strategy isn't just about short-term gains, but securing a portfolio of stocks that can weather economic storms and continue to deliver stable and predictable returns. This investment strategy focuses on companies with unique strengths such as brand recognition, patent protection, proprietary technology, and network effects. These moats ensure long-term profitability and market leadership, making the companies resilient in volatile markets. Here we recommend three Wide Moat stocks with a favorable Zacks Rank. These stocks have solid short-term price upside potential. The stocks are Pfizer Inc. PFE, The Coca-Cola Co. KO and The Walt Disney Co. DIS. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The chart below shows the price performance of our five picks in the past three months. Pfizer Inc. Pfizer is one of the largest and most successful drugmakers in the field of oncology. Its position in oncology was strengthened with the addition of Seagen. This drug generated sales of $3.4 billion in 2024, up 38% on a pro forma basis. PFE has committed significant resources toward the development of treatments in the fields of oncology, internal medicine, immunology and inflammation and vaccines. In 2024, PFE gained approval for some interesting new products like two gene therapies for hemophilia, Hympavzi (marstacimab) and Beqvez/Durveqtix (fidanacogene elaparvovec). PFE expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Continued growth in non-COVID sales and significant cost-reduction measures should drive profit growth. Lucrative Short-Term Price Upside Potential for PFE Stock Pfizer has an expected revenue and earnings growth rate of 0.6% and 1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% in the last 30 days. Pfizer presently carries a forward P/E of 7.41X for the current-year, compared with 12.96X for the industry and 19.20X for the S&P 500. PFE currently carries a forward P/S of 2.08X for the current-year, compared with 3.15X for the industry and 2.99X for the S&P 500. It also carries a forward P/B of 1.43X for the current-year, compared with 4.66X for the industry and 3.52X for the S&P 500. The short-term average price target of brokerage firms for the stock represents an increase of 23.7% from the last closing price of $23. The brokerage target price is currently in the range of $23-$33. This indicates a maximum upside of 43.5% and no downside. The Coca-Cola Co The Coca-Cola experiences positive business trends, as evidenced by its strong track record of beating expectations. KO has benefited from continued business momentum, aided by higher pricing across markets facing intense inflation and a favorable mix. Coca-Cola's all-weather strategy, combining marketing, innovation, and revenue growth management, supports its vision of a total beverage company and is expected to drive revenue growth in 2025. KO has provided an optimistic view for 2025. Impressive Short-Term Price Upside Potential for KO Shares Coca-Cola has an expected revenue and earnings growth rate of 2.4% and 2.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same in the last 60 days. KO has a return on equity (ROE) of 45.5% compared with 14.1% for the industry and 16.92% for the S&P 500. The short-term average price target of brokerage firms for the stock represents an increase of 11.1% from the last closing price of $71.93. The brokerage target price is currently in the range of $70-$86. This indicates a maximum upside of 19.6% and a downside of 2.7%. The Walt Disney Co. The Walt Disney reported steady second-quarter fiscal 2025 results wherein revenues and earnings increased year-over-year. Domestic Parks & Experiences saw growth at domestic parks, Disney Vacation Club and Disney Cruise Line, partially offset by the decline at international locations including Shanghai Disney Resort and Hong Kong Disneyland Resort. In Entertainment, DIS expects double-digit percentage segment operating income growth in fiscal 2025. ESPN continues to reinforce its position as sports' dominant platform, with the second quarter delivering its most-watched primetime ever and 32% viewership growth in the key 18-49 demographic. DIS has successfully transformed its streaming business from a loss-leader to a profitable growth engine. After reporting its first-ever Direct-to-Consumer (DTC) operating profit in FY2024, the momentum has accelerated in FY2025 with second-quarter DTC operating income reaching $336 million. Attractive Short-Term Price Upside Potential for DIS Stock The Walt Disney has an expected revenue and earnings growth rate of 3.8% and 15.1%, respectively, for the current year (ending September 2025). The Zacks Consensus Estimate for current-year earnings has improved 4.6% in the last 30 days. At present, DIS carries a forward P/E of 19.83X for the current year, compared with 20.37X for the industry and 19.20X for the S&P 500. The short-term average price target of brokerage firms for the stock represents an increase of 10.9% from the last closing price of $112.66. The brokerage target price is currently in the range of $100-$148. This indicates a maximum upside of 31.4% and a downside of 11.2%. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report
Globe and Mail
19-05-2025
- Business
- Globe and Mail
PFE vs. MRK: Which Oncology Drug Giant is a Better Buy Now?
Merck MRK and Pfizer PFE are leading pharmaceutical companies with strong product and pipeline portfolios in oncology. Both companies also have presences in vaccines, neuroscience, and immunology. However. oncology accounts for more than 50% of Merck's total revenues. Blockbuster PD-L1 inhibitor, Keytruda, approved for several types of cancers, alone accounts for around 50% of its pharmaceutical sales. As regards Pfizer, oncology sales comprise around 25% of its total revenues. Its position in oncology was strengthened with the acquisition of Seagen in 2023. Both companies are seeing consistent sales and earnings growth. Both boast robust pipelines with promising candidates in late-stage development. But which one is a better investment today? Let's take a closer look at their fundamentals, growth prospects and challenges to make an informed choice. The Case for PFE Pfizer is one of the largest and most successful drugmakers in oncology. After witnessing possibly its worst slowdown in 2023/early 2024, the company seems to be gradually making a comeback and entering a transition phase. With its COVID-related uncertainties diminishing, its revenue volatility is declining. Though COVID revenues are declining, Pfizer's non-COVID operational revenues improved in 2024, driven by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products like Nurtec and those from Seagen. The positive trend continued in the first quarter of 2025. The continued growth of Pfizer's diversified portfolio of drugs, particularly oncology, should support top-line growth in 2025. Pfizer expects cost cuts and internal restructuring to deliver savings of $7.7 billion by the end of 2027. Pfizer's significant cost-reduction and efforts to improve R&D productivity measures should drive profit growth. Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products, including Eliquis, Vyndaqel, Ibrance, Xeljanz and Xtandi, will face patent expirations. The Medicare Part D redesign is also expected to hurt sales of Pfizer's higher-priced drugs like Vyndaqel, Ibrance and Xeljanz in 2025. The company has also faced its share of setbacks. Last month, Pfizer said it is discontinuing the development of its GLP-1R agonist, danuglipron, which was being developed as a weight loss pill. Pfizer took the decision after one of the participants in the dose-optimization studies developed a potentially drug-induced liver injury, which resolved after danuglipron was discontinued. Eli Lilly LLY and Novo Nordisk NVO currently dominate the obesity space. Also, uncertainties around tariffs and a volatile macro environment remain headwinds. Moreover, stocks of vaccine makers like Pfizer have been under pressure with the appointment of Robert F. Kennedy Jr., a well-known vaccine skeptic, as the Secretary of Health and Human Services (HHS). As of March 31, 2025, Pfizer had cash and cash equivalents of $17.3 billion on its balance sheet and $57.6 billion in long-term debt. Its debt-to-capital ratio of 0.41 is slightly higher than the industry's average of 0.38. The Case for MRK Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck's steady revenue growth in the past few years. Keytruda's sales are gaining from rapid uptake across earlier-stage indications, mainly early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also boosting sales growth. The company expects continued growth from Keytruda, particularly in early lung cancer. Merck is also developing a subcutaneous formulation of Keytruda that can extend its patent life. Merck is working on different strategies to drive Keytruda's long-term growth. Merck has been making meaningful regulatory and clinical progress across areas like oncology (mainly Keytruda), vaccines and infectious diseases while executing strategic business moves. Merck's phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. Merck's new products, Capvaxive and Winrevair, are witnessing strong launches and have the potential to generate significant revenues over the long term However, sales of Gardasil, which is Merck's second-largest product, are declining due to a weak performance in China, which resulted from sluggish demand trends amid an economic slowdown. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs. Merck is heavily reliant on Keytruda. Though Keytruda may be Merck's biggest strength and a solid reason to own the stock, it can also be argued that the company is excessively dependent on the drug and it should look for ways to diversify its product lineup. There are rising concerns about the firm's ability to grow its non-oncology business ahead of the upcoming loss of exclusivity of Keytruda in 2028. Also, competitive pressure might increase for Keytruda in the near future. It exited 2024 with cash and cash equivalents of $9.2 billion against long-term debt of $33.5 billion, resulting in a debt-to-capital ratio of 0.41, which is higher than the industry's average of 0.38. How Do Estimates Compare for PFE & MRK? The Zacks Consensus Estimate for PFE's 2025 sales implies a year-over-year decrease of 0.6% and 1%, respectively. EPS estimates for both 2025 and 2026 have risen over the past 60 days. PFE Estimate Movement The Zacks Consensus Estimate for MRK's 2025 sales and EPS implies a year-over-year increase of 0.9% and 16.7%, respectively. EPS estimates for both 2025 and 2026 have declined over the past 60 days. MRK Estimate Movement Price Performance and Valuation of PFE & MRK Year to date, Pfizer's stock has declined 10.8% and Merck's stock has plunged 22.9% compared with the industry 's decrease of 4.0% Image Source: Zacks Investment Research Both MRK and PFE are priced lower than the industry from a valuation standpoint. MRK is more expensive than PFE, going by the price/earnings ratio. Merck's shares currently trade at 8.24 forward earnings, higher than 7.41 for Pfizer. Image Source: Zacks Investment Research However, both Merck and Pfizer are cheaper than other large drugmakers like AbbVie, AstraZeneca, Eli Lilly and Novo Nordisk. Pfizer's dividend yield of 7.5% is higher than MRK's 4.3%. Pfizer's return on equity of 20.3% is lower than Merck's 43.2% PFE vs. MRK: Which is a Better Pick? The potential impact of tariffs imposed by the United States and some other countries is a concern. Although both Pfizer and Merck's 2025 earnings guidance accounts for the impact of tariffs already in place, the potential expansion of tariffs in other geographies or increases in retaliatory tariffs would have a negative impact. Though pharmaceuticals have been exempted from tariffs this time around, they could well be Trump's target in the next round, considering the President's goal to shift pharmaceutical production back to the United States, mostly from European and Asian countries. However, both Pfizer and Merck said on their respective first-quarter conference calls that if the import tariffs are implemented on pharmaceutical products, they are well placed to manage the impact. Trump and the Republican government also continue to stress on the control of drug prices with the latest attempt being his 'most favored nations' policy.' Merck has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Merck has one of the world's best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. However, the company's problems are too many at present, including persistent challenges for Gardasil in China, potential competition for Keytruda and rising competitive and generic pressure on some drugs. All these factors have raised doubts about Merck's ability to navigate the Keytruda loss of exclusivity period successfully. Consistently declining estimates also reflect analysts' pessimistic outlook for the stock. Pfizer, on the other hand, with its improving growth prospects, rising estimates, cheaper valuation, and higher dividend yield, is a better bargain for investors looking to invest in drug/biotech stocks with higher growth potential. Pfizer, with a Zacks Rank #2 (Buy), is a clear-cut winner. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.0% per year. So be sure to give these hand picked 7 your immediate attention. See them now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Pfizer Inc. (PFE): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report
