Pfizer shares drop after strong earnings report: Investors stay cautious; company keeps 2025 forecast
Pfizer Inc. reported a 530% jump in fourth-quarter 2024 profit and 22% higher revenue, driven by Paxlovid sales and its Seagen acquisition. Despite the strong results, shares fell over 2% as investors worried about patent losses, Medicare pricing changes, and slowing COVID-related growth. Pfizer maintained its 2025 forecast and focus on oncology expansion.
Profit doesn't translate to rise in stock
Pfizer Inc. reported a big rise in profit for Q4 of 2024. However, the news failed to lift investor confidence. The company’s adjusted earnings per share (EPS) stood at $0.63, up 530% from the same period last year. This result was much higher than Wall Street’s estimate of $0.47 per share. Total revenue reached $17.76 billion, showing a 22% rise from the previous year. The growth came mainly from strong demand for its COVID-19 drug Paxlovid and contributions from its $43 billion acquisition of Seagen, a cancer treatment company. Despite these strong numbers, Pfizer’s stock fell more than 2% when trading began on Tuesday. Analysts say this drop shows that investors are still worried about the company’s long-term outlook.
Patent losses and pricing changes
Pfizer’s share price is now about 50% lower than its peak during the pandemic. One major concern is the loss of patent protection for some of its key drugs, which may affect future earnings. The company also expects a $1 billion hit from changes in Medicare’s drug pricing policy. Sales of Paxlovid rose to $727 million as winter COVID-19 cases increased in the United States. However, vaccine sales fell sharply by 38% to $3.4 billion. Still, this figure was slightly better than analysts had expected. As per market experts, while Pfizer’s COVID-related products helped the company perform well this quarter, those products may not continue to drive growth in the coming years.
Mixed analyst views
Pfizer confirmed its 2025 financial guidance, expecting revenue between $61 billion and $64 billion. It also projected adjusted EPS between $2.80 and $3.00. The company said it would focus on cutting costs and expanding its cancer drug portfolio, which it sees as an important part of its future. Analysts have mixed views about Pfizer’s path forward. Some see potential in its new drugs and Seagen’s cancer treatments, while others are concerned about the cost of integrating the acquisition and the risk from losing patents. For now, Wall Street is watching how well Pfizer manages its spending, brings new medicines to market, and reduces its reliance on COVID-19 products.