Pfizer: Cutting Valuation on Lower-Than-Expected 2024 Guidance and Weak COVID-19 Sales Outlook

We are lowering our Pfizer fair value estimate to $42 from $47 largely based on Pfizer’s lower-than-expected 2024 guidance. Following the close of the Seagen acquisition, Pfizer provided 2024 guidance that included COVID-19 product guidance of $8 billion, which was $5 billion lower than our expectation. Also, Pfizer acknowledged the firm would be unlikely to hit the previous 6% growth-rate guidance from 2020 to 2025 (excluding COVID-19 products sales). Despite the falling outlook, the firm reiterated support for the dividend, which we believe is secure and will likely support the stock valuation.