Pfizer Earnings: Impressive Q2 Results Bolster 2025, but Awaiting More Pipeline Data

Key Morningstar Metrics for Pfizer

• Fair Value Estimate: $38
• Morningstar Rating: ★★★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Medium

What We Thought of Pfizer’s Earnings

Pfizer’s PFE second-quarter 10% revenue growth and adjusted EPS of $0.78 were ahead of consensus expectations. Management maintained full-year revenue guidance of $61 billion-$64 billion and raised adjusted EPS guidance by $0.10 at the midpoint (after absorbing a $0.20 licensing payment to 3SBio).

Why it matters: Pfizer had a strong quarter across multiple products and geographies, and commentary on US policy changes reassured investors, driving shares up 5% on Aug. 5.

• Solid growth of 22% from cardiovascular drug Vyndaqel and 11% in oncology (double-digit growth from Padcev and Xtandi) led broadly strong sales ahead of our expectations, and cost-cutting programs are starting to drive meaningful earnings benefits.
• Pfizer’s guidance absorbs current tariffs as well as potential US price adjustments tied to the Trump administration’s July 31 letter to pharma CEOs, which provides some reassurance that the firm does not expect a drastic change in US pricing policy tied to most-favored-nation pricing.

The bottom line: We’re maintaining our $38 per share fair value estimate for narrow-moat Pfizer following the solid quarter, and despite the positive investor reaction, we think shares remain undervalued.

• While Pfizer remains on track for an impressive $7.2 billion in cost cuts by the end of 2027, we think the market is more interested in pipeline progress and the ability to grow beyond upcoming patent expirations for key drugs in 2027 (Ibrance) and 2028 (Vyndaqel and Eliquis).

Coming up: We’re closely watching Pfizer’s pipeline for evidence that it can support a quick recovery from potential top-line declines in 2028-29.

• We’re awaiting phase 3 data later this year for Padcev in muscle-invasive bladder cancer that could begin to broaden the drug’s label.
• Pfizer expects to start several important phase 3 studies this year, led by oncology programs including PD-1/VEGF bispecific antibody SSGJ-707 (from 3SBio) and the Seagen pipeline (PDL1V and sigvotatug vedotin).