Pfizer Shares Under Pressure as Future Earnings Outlook Disappoints

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Pfizer Inc. has provided a detailed financial roadmap for the coming years, but the updated guidance has failed to impress investors on Wall Street. The pharmaceutical giant's profit forecast for 2026 has notably undershot consensus analyst estimates, casting a shadow over its ongoing transition from the pandemic era and raising questions about the duration of this challenging phase.

On December 16, 2025, Pfizer unveiled its financial planning. The company anticipates 2026 revenue to fall within a range of $59.5 billion to $62.5 billion. Its adjusted earnings per share are projected to be between $2.80 and $3.00. This guidance came in below the market's expectation, as analysts had been forecasting a consensus EPS of $3.06.

For the current fiscal year, 2025, the firm has narrowed its revenue outlook to approximately $62.0 billion. This refines a previous forecast that called for $61.0 billion to $64.0 billion. The earnings per share projection for 2025 remains unchanged at $3.00 to $3.15. The core issue highlighted by the new guidance is the anticipated trajectory for profits: rather than increasing in 2026, earnings are expected to show a tendency to decline compared to the prior year.

Navigating the Post-Pandemic Landscape and Patent Cliffs

The primary driver behind this tempered outlook is the sharp contraction in pandemic-related revenue. Income from COVID-19 products is projected to dwindle to roughly $5 billion in 2026. In response, Bank of America adjusted its price target for Pfizer shares downward from $28 to $27, while maintaining a neutral rating. The bank cited a faster-than-anticipated decline in COVID-related sales.

Compounding this challenge is an estimated negative impact of approximately $1.5 billion from patent expirations. Key blockbuster drugs, including Ibrance and Eliquis, are set to lose patent protection during this decade. In response, Pfizer is pivoting toward new growth areas. Notably, in December, the company entered into a licensing agreement with Yao Pharma for obesity therapies, a deal valued at up to $2.1 billion. Concurrently, cost-cutting measures are underway, including the elimination of over 200 positions in Switzerland.

Dividend Sustainability in Focus

Despite these headwinds, Pfizer's commitment to its shareholder dividend remains firm. The quarterly payout stands at $0.43 per share, translating to an annual dividend of $1.72. At recent share prices, this represents a yield of nearly 6.9%. However, the payout ratio has now exceeded 90% of earnings—a level that offers limited flexibility for future increases unless operational cash flow improves. The next ex-dividend date is scheduled for January 23, 2026.

Pfizer's stock is currently trading around the $25 mark. Analyst opinions are mixed: on December 18, Scotiabank issued a buy recommendation with a $30 price target, while Morgan Stanley maintains an "Equal-weight" rating with a $27 target. The market will be watching closely to see if the company's new pipeline in obesity and oncology can successfully fill the revenue gaps left by its aging blockbusters. For now, 2025 and 2026 are likely to be transitional years for the pharmaceutical leader.