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Pfizer (PFE) reaffirmed its FY25 EPS guidance but trimmed its revenue outlook, while issuing FY26 EPS guidance that missed Wall Street expectations. The stock is trading sharply lower as investors digest a projected yr/yr revenue decline and increased spending on a post-COVID pipeline.

• PFE reaffirmed FY25 EPS guidance of $3.00–$3.15 but lowered its revenue midpoint to approximately $62.0 bln (from $61–$64 bln), primarily due to steeper-than-anticipated declines in COVID-19 product demand and the transition to commercial markets.
• FY26 EPS guidance of $2.80–$3.00 fell short of analyst estimates. This shortfall is largely driven by higher R&D expenses and a roughly $0.16/share dilutive impact from the $10 bln Metsera acquisition.
• FY26 revenue is projected at $59.5–$62.5 bln, reflecting a 1% yr/yr decline at the midpoint. This includes an expected $1.5 bln drop in COVID-19 sales and a $1.5 bln hit from the loss of exclusivity on key products like Eliquis, Xeljanz, and Vyndaqel.
• PFE is increasing R&D spending to a range of $10.5-$11.5 bln for FY26. Management is prioritizing new therapeutic areas to offset the "patent cliff," even if this higher spend pressures short-term earnings.
• To reignite growth, PFE is betting heavily on its "agentic" shift toward high-growth therapeutic areas. The Metsera acquisition is the cornerstone of its re-entry into the obesity market, with next-generation GLP-1 and amylin analogs (like MET-097i) currently in Phase 2 trials.
• Additionally, PFE’s oncology segment remains a bright spot, bolstered by the Seagen integration and promising data for Tukysa in first-line maintenance for breast cancer.

Briefing.com Analyst Insight:

PFE is navigating a painful transition period as its pandemic-era windfall evaporates and its legacy blockbuster portfolio faces generic competition. While the reaffirmed FY25 EPS provides some floor, the lowered revenue outlook suggests that the core non-COVID portfolio isn't yet growing fast enough to fill the vacuum. The FY26 guidance is particularly discouraging, as it indicates that earnings will likely remain stagnant or decline slightly as the company digests the Metsera deal and ramps up R&D. Investors are essentially being asked to fund a multi-year bridge to a post-LOE future, which is a difficult sell in a market that prioritizes immediate growth. Until PFE can demonstrate a clear "hit" from its new oncology or obesity candidates, the stock's discounted valuation may remain a "value trap."