Does Recent Pipeline Progress Signal Opportunity for Pfizer Investors in 2025?

• Wondering if Pfizer is trading at a bargain right now? You are not alone, as plenty of investors are curious whether the company’s price matches its long-term value.
• Shares have had a turbulent time in recent months, with a 3.8% drop over the past week but recovering to a 0.8% gain over the last 30 days and up 7.0% across the past year.
• Several headlines have driven sentiment lately, from renewed focus on Pfizer’s pipeline of new medications to shifts in regulatory and competitive dynamics in the pharmaceutical space. These updates help explain why the market can seem unpredictable for the stock.
• Pfizer scores a 5/6 on our valuation checks, meaning five out of six fundamental measures suggest the company is undervalued. We are diving into those valuation methods next, and later, we will reveal an even more intuitive way to think about value that most investors overlook.

Find out why Pfizer's 7.0% return over the last year is lagging behind its peers.

Approach 1: Pfizer Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a way to assess a company's value by projecting its future cash flows and discounting them back to today's dollars. This approach helps investors estimate the intrinsic worth of a business based on how much cash it is expected to generate over time.

For Pfizer, analysts report a current Free Cash Flow (FCF) of $9.95 Billion. Over the next five years, projections suggest FCF will steadily increase, with Simply Wall St extrapolating it to $16.36 Billion by the end of 2029. These forecasts, combined with further estimates through 2035, form the basis for the DCF calculation.

According to the 2 Stage Free Cash Flow to Equity model, Pfizer's intrinsic value is estimated at $62.40 per share. This represents a 60.1% discount compared to the current market price, indicating considerable potential for upside.

In summary, the DCF model suggests that Pfizer is trading well below its intrinsic value based on future cash flow expectations.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Pfizer is undervalued by 60.1%. Track this in your watchlist or portfolio, or discover 898 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Pfizer.

Approach 2: Pfizer Price vs Earnings

For companies like Pfizer that generate consistent profits, the Price-to-Earnings (PE) ratio is a go-to valuation metric. It expresses how much investors are willing to pay for each dollar of earnings and is especially useful for established firms where profits provide a clear signal of value.

Growth expectations and perceived risks both play a big role in what is considered a "normal" or "fair" PE ratio. High-growth companies typically command higher multiples, while more mature or riskier companies trade at lower ones.

Pfizer currently trades at a PE ratio of 14.4x. That is notably lower than both the average for industry peers (16.7x) and the wider Pharmaceuticals sector, which sits around 19.4x.

Simply Wall St introduces the concept of a “Fair Ratio” to go a step beyond conventional benchmarks. For Pfizer, the proprietary Fair Ratio is calculated at 24.3x, which takes into account company-specific factors such as earnings growth outlook, profit margin, size, and risk profile. This approach is not limited to industry averages and helps provide a more tailored sense of whether the stock is cheap or expensive when looking at the big picture.

Compared to its Fair Ratio, Pfizer’s current PE of 14.4x is significantly lower. This points to the stock being undervalued using this method, as the market is pricing it below what would be expected given its fundamentals.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1416 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Pfizer Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives.

A Narrative is a simple, story-based approach to investing that allows you to create and follow a personal perspective on a company by connecting your assumptions about its future growth, margins, and risks directly to a fair value estimate. Narratives make it easy to move beyond static number-crunching by letting you link Pfizer’s real-world story to the financial forecasts that matter most for your decision making.

Available in the Community section of Simply Wall St, Narratives are a dynamic, accessible tool used by millions of investors to capture their reasoning and compare it against others in real time. As news, earnings, or major events hit, your Narrative can update automatically, helping you track how new information may change Pfizer’s fair value or your view on whether it is a buy or sell.

For example, some investors on the platform build bullish Narratives projecting Pfizer could be worth as much as $35.77 per share if new cancer and obesity drugs drive strong growth, while others set more cautious fair values near $24.00 due to concerns about patent expirations and tighter regulations.

With Narratives, you can clearly see what drives each price target and decide which story and valuation best matches your outlook.

For Pfizer, we’ll make it really easy for you with previews of two leading Pfizer Narratives:

🐂 Pfizer Bull Case

Fair Value: $29.08

Undervalued by approximately 14.5%

Forecast Revenue Growth: -2.66%

• Pfizer's expansion in innovative therapies, digitalization, and emerging markets is expected to offset pressures from patent expirations and competition. This supports long-term growth.
• Analysts project profit margins to rise, with earnings reaching $12.8 billion by 2028, helped by ongoing operational efficiencies and product portfolio shifts.
• Risks include tighter global drug pricing, patent cliffs for major brands, and rising competitive threats. The consensus sees about 14% upside from the current price.

🐻 Pfizer Bear Case

Fair Value: $24.00

Overvalued by approximately 3.7%

Forecast Revenue Growth: -4.21%

• Aggressive regulatory reforms, drug price negotiations, and upcoming patent expirations are seen as major headwinds that may limit revenue growth and compress margins.
• Heavy reliance on new R&D to replace aging drugs poses significant risk, as loss of exclusivity and increased competition may outpace new launches.
• Despite operational improvements and pipeline acquisitions, bearish analysts see limited upside, with the current price slightly above their fair value estimate.

Do you think there's more to the story for Pfizer? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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