TLDR
- Pfizer reported Q1 adjusted EPS of $0.92, beating expectations of $0.67
- Revenue was $13.7 billion, slightly below expected $13.9 billion
- Company reaffirmed 2025 guidance but cannot predict tariff impacts
- Cost-cutting efforts target $4.5 billion in savings for 2025
- Stock gained slightly in premarket trading despite being down 13% YTD
Pfizer (PFE) delivered stronger-than-expected first-quarter earnings on Tuesday, offering investors a glimmer of hope despite ongoing challenges facing the pharmaceutical giant. The company, once hailed for its role in combating the COVID-19 pandemic, has seen its stock price tumble to levels not seen since 2012.
The drugmaker reported adjusted earnings per share of $0.92 for Q1 2025, handily beating Wall Street’s expectations of $0.67. This represents an impressive earnings surprise, particularly when analysts like Leerink Partners’ David Risinger had recently cut their expectations to $0.59 per share.
Revenue came in at $13.7 billion, slightly below the $13.9 billion analysts had forecast. This marked an 8% decline compared to the same period last year, largely due to falling COVID-related sales.
Despite missing revenue expectations, Pfizer reaffirmed its 2025 financial guidance. The company still expects revenue between $61 billion and $64 billion and adjusted earnings per share between $2.80 and $3.00.
Financial Discipline Pays Off
CFO David Denton attributed the quarter’s performance to the company’s “solid” financial discipline. He noted that Pfizer is “currently trending towards the upper end” of its 2025 adjusted earnings guidance range.
This positive outlook comes even as the company faces headwinds from Medicare Part D changes. These changes are expected to reduce 2025 sales by about $1 billion and slow overall growth by approximately 1.6% compared to 2024.
The company remains committed to its cost-cutting initiative. Pfizer expects to save approximately $4.5 billion in 2025 through these ongoing efforts.
Interestingly, the company’s stock rose 0.6% to $23.19 in premarket trading. This small gain comes after Pfizer shares have dropped 13% since the beginning of the year.
Challenges on Multiple Fronts
The news isn’t all rosy for Pfizer. The company faces several challenges that have eroded investor confidence over time.
A series of patent expirations threatens to eat away at Pfizer’s revenue through the end of the decade. These expirations represent a longstanding concern for the company and its investors.
Adding to these worries is the Trump administration’s promise to place tariffs on pharmaceutical imports. Pfizer specifically mentioned in its earnings report that it is “unable to predict” tariff-related impacts “at this time” and noted that its guidance doesn’t include potential impacts from future tariffs or trade policy changes.
The company has also faced setbacks in its product pipeline. On April 14, Pfizer dropped its oral obesity drug candidate danuglipron due to concerns about liver damage risks. The company had previously touted its obesity pill candidates as potential mega-blockbusters.
Wall Street’s faith in the company has largely disappeared. The stock trades at one of the lowest earnings multiples among its peers, and most analysts covering the company rate it a “Hold.”
Coming into this week, Pfizer shares were down 14% this year and 11% over the past 12 months. The stock closed at $21.59 on April 10, its lowest close since July 2012.
These results come as Pfizer and Bristol Myers Squibb share revenue from the blood thinner Eliquis, which recently reported sales that slightly missed expectations.
The company’s first-quarter revenue of $13.7 billion represents a year-over-year decline of 8%, reflecting the ongoing challenges Pfizer faces in a post-pandemic market.
According to TipRanks, Wall Street maintains a “Moderate Buy” consensus rating on PFE stock, based on 12 Holds and six Buys assigned in the last three months. The average Pfizer stock price target stands at $27.75, suggesting over 20% upside potential from current levels.
The company is hosting an investor call at 10 a.m. on Tuesday to discuss these results in greater detail.
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