Pfizer Inc. has forecast its 2025 profits and revenue to align closely with Wall Street expectations, offering some reassurance to investors following a challenging year.
The company announced on Tuesday that it anticipates adjusted earnings of $2.80 to $3 per share for 2025, with revenues ranging from $61 billion to $64 billion. Analysts had previously projected earnings of $2.88 per share and revenue of $63.26 billion.
Shares of Pfizer rose about 2% in premarket trading after the announcement, as the pharmaceutical giant also indicated that sales from its Covid-19 vaccine and treatment would likely remain consistent with 2024 levels, providing some stability after the sharp decline in demand for pandemic-related products.
Despite these projections, Pfizer has faced significant challenges this year. The company’s stock has dropped nearly 12%, trading at less than half its value compared to the peak of the Covid-19 pandemic. Much of this decline is attributed to the drop in sales of Covid-19 products and increasing scrutiny from activist hedge fund Starboard Value, which has criticized Pfizer’s management for overspending on acquisitions without delivering sufficient returns.
In response to these concerns, Pfizer has been focusing on cost-cutting measures and divesting non-core businesses to reduce its debt load. The company has also been navigating regulatory changes, including a projected $1 billion revenue hit from adjustments to Medicare’s Part D prescription program under the Biden administration’s Inflation Reduction Act. Pfizer estimates that these changes, which include new manufacturer discounts, will offset the benefits from a new $2,000 out-of-pocket spending cap for seniors.
Looking ahead to 2024, Pfizer has maintained its revenue guidance of $61 billion to $64 billion, with adjusted earnings ranging from $2.75 to $2.95 per share. Despite ongoing challenges, Pfizer’s forecast suggests a path to stability, with the company aiming for operational growth of 10% to 18% year-over-year.
Investors have remained cautious, however, as Pfizer’s recent moves to acquire cancer drug developer Seagen for $43 billion, and other high-profile deals totaling $70 billion, have raised concerns over the company’s ability to generate profitable returns from these acquisitions. Additionally, internal research and development efforts, including a gene therapy for Duchenne muscular dystrophy that failed in a major trial, have yet to yield significant breakthroughs.
Starboard Value, which acquired a $1 billion stake in Pfizer, has called for changes in management, even suggesting that CEO Albert Bourla could be replaced. In response, Pfizer has announced additional cost reductions of $500 million and plans to continue refining its strategies for growth. The company’s efforts to develop an obesity drug, which is a growing area of interest in the pharmaceutical industry, have also faced setbacks, though the field remains highly competitive.
In an effort to bolster its scientific leadership, Pfizer recently appointed Chris Boshoff, head of oncology research, as the company’s new chief scientific officer, a role he will begin in January.
CNBC, Bloomberg, and the Wall Street Journal contributed to this report.
