Pfizer (NYSE: PFE) shares rose nearly 3% to $25.98 in premarket trading on December 17 after the pharmaceutical giant released its 2025 financial guidance.
While the outlook painted a mixed picture, investor sentiment leaned positive, driven by an optimistic earnings forecast that signals progress in Pfizer’s ongoing turnaround efforts.
At press time, Pfizer stock was trading at $26.30, marking a 2.7% gain for the day, with the monthly chart showing a 3% increase. Despite these gains, Pfizer remains down 11% year-to-date and trades at less than half its pandemic peak value.
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Financial projections for 2025
Pfizer projected 2025 revenue between $61 billion and $64 billion, which fell roughly in line with Wall Street expectations of $63.26 billion.
The company struck a more optimistic tone with its adjusted earnings per share (EPS) outlook, forecasting a range of $2.80 to $3.00. The midpoint of $2.90 closely matches analyst expectations and outpaces more cautious estimates of $2.82 to $2.86.
Additionally, Pfizer projected that FY25 sales of its COVID-19 vaccine will remain steady compared to 2024 levels.
Cost-cutting measures ease financial pressure
Amid financial headwinds, including declining COVID-related revenue and rising competition, Pfizer’s aggressive cost-cutting strategy has reassured investors.
The company has already achieved $4 billion in net cost savings through 2024 and anticipates an additional $500 million in savings next year.
“We’ve been successful in delivering on our goal of $4 billion in net operating expense savings through 2024 from our cost realignment program, with an additional $500 million still expected to come in 2025.”
– Dr. Albert Bourla, Pfizer Chairman and Chief Executive Officer
However, Pfizer faces new challenges, particularly a $1 billion revenue hit from changes to Medicare Part D under President Biden’s Inflation Reduction Act.
The law introduces a $2,000 cap on out-of-pocket drug costs for seniors starting in 2025, but Pfizer says the added manufacturer discounts will outweigh the policy benefits.
Analyst sentiment and stock outlook
Analysts are viewing Pfizer’s guidance as a step in the right direction. Edward Jones analyst John Boylan said the outlook represents “progress toward a more predictable financial structure,” while BMO Capital Markets analyst Evan Seigerman described the forecasts as “reasonable and achievable,” leaving room for upgrades later in the year.
That being said, with steady COVID-19 product sales and a focus on operational efficiency, Pfizer appears poised to navigate its challenges, offering investors a clearer and more predictable trajectory for the year ahead.
Featured image via Shutterstock
