PFE
PFIZER INCNYSEValuation snapshot
Below base casePrice is between the bear and base cases.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives PFE's base case?
base-case thesisPfizer guided full-year 2026 revenue to $60.5-62.5 billion, essentially flat to slightly down from 2025's $62.6 billion, as declining COVID-19 product sales and the start of Eliquis/Ibrance patent losses offset growth elsewhere. The newer cancer portfolio acquired through the Seagen deal is growing about 20% a year, with the antibody-drug Padcev up 39%, which in this case is enough to gradually offset the patent losses and return the company to modest growth by 2028-2030. Pfizer's cost-cutting program, which has already delivered $4.5 billion of a $7.7 billion target, steadily improves profitability. Overall this is a 'muddle through' case: a temporary dip followed by a return to slow, steady growth.
What shapes the assumptions
FY2026 guidance midpoint of $60.5-62.5B, raised on non-COVID strength
FY2026 revenue guidance
Informs revenue growth
Seagen oncology portfolio growing 20% operationally, Padcev +39%
oncology/launched-and-acquired portfolio growth
Raises revenue growth
$7.7B cost-realignment program, $4.5B already realized
cumulative net cost savings
Raises operating margin
Company guidance of ~15% adjusted effective tax rate for 2026
adjusted effective tax rate guidance
Informs tax rate
Continued bolt-on M&A and Phase III pipeline funding (berobenatide)
capex/D&A and R&D spend intensity
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows -7.2% a year. Over the last 5 years it grew 2.9% a year — so the price assumes far less than it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 22.4% operating margin, against the 32.0% assumed here.
- How confident is this estimate?
- Robustness 45.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
2. Enterprise cost-realignment program: cumulative net savings target, as disclosed
Tracks the cumulative annual net savings target management has publicly committed to from its multi-year cost-realignment program, the main lever behind margin normalization.
$7.7B
reported3. Launched & acquired product portfolio operational revenue growth (Seagen-led oncology)
Operational growth rate of Pfizer's launched-and-acquired product portfolio, dominated by the Seagen oncology franchise, which is the primary offset to small-molecule patent losses.
22.0%
reported4. Company-guided adjusted effective tax rate
Management's own guided effective tax rate on adjusted income, the most direct available signal for the model's normalized tax-rate assumption.
15.0%
reported5. Capital expenditure relative to depreciation & amortization
Ratio of capex to D&A, a proxy for whether Pfizer is investing ahead of, at, or below the rate needed to maintain its existing asset base — a direct input to the reinvestment-rate assumption.
81.1%
derivedBase inputs from financials
source period →Base revenue (TTM)
$63.7B
Diluted shares
5,699,000,000
Net cash
-$62.1B
Bear
medium confidence$25.85
IV / share
-10.3% vs $28.81
- Explicit cash flows
- $7.73
- Terminal value
- $29.02
- Net cash
- -$10.90
- Intrinsic value / share
- $25.85
112.3% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth-3.0% → -7.0% → -5.0% → -2.0% → 0.0%medium
How derived: Starting from FY2025 actual revenue of $62.579B (down 1.6% YoY) and Pfizer's own raised FY2026 guidance of $60.5-62.5B (COVID product revenue cut to ~$4B), the bear case takes the low end of guidance in year 1, then assumes Eliquis (US patent runs into late 2026) and Ibrance (US patent extended to March 2027) — products that generated $21.4B, about one-third of 2024 revenue — erode faster than new launches and cost cuts can replace, before the base stabilizes by year 5.
Why this confidence: Explicit, recently reaffirmed management guidance for FY2026 revenue range ↑, Eliquis and Ibrance patent expiration dates are legally fixed and well documented ↑, Pace and depth of post-LOE generic erosion and offset from new launches is inherently uncertain ↓
Measured by
Evidence for
- Products facing 2026-2027 loss of exclusivity generated $21.4B in 2024, about one-third of Pfizer's total revenue.[Can Pfizer's New & Acquired Drugs Offset Its Looming Patent Cliff? - Yahoo Finance]· secondary
- FY2026 guidance lowered expected COVID-19 product revenue to approximately $4 billion from approximately $5 billion previously.[Pfizer Q2 2026 Earnings Release (8-K)]· primary
Evidence against
- Pfizer raised the midpoint of FY2026 revenue guidance at Q2 2026 on a non-COVID product beat of roughly $1.5 billion, suggesting the base business is more resilient than a straight-line bear erosion path.[Pfizer Reports Second-Quarter Results And Raises Midpoint of 2026 Revenue Guidance - Yahoo Finance]· secondary
Operating margin26.0%medium
How derived: TTM GAAP operating margin was approximately 19.5% through 2024/2025 after elevated intangible-asset impairments and R&D spend; the bear case assumes the $7.7B cost-realignment program only partially offsets gross-margin pressure from generic erosion and continued impairments, lifting normalized margin to 26% rather than back toward Pfizer's pre-pandemic high-30s adjusted margins.
Why this confidence: GAAP operating margin and impairment drivers are directly reported in the FY2025 earnings release ↑, Underlying non-GAAP/adjusted margin trajectory was not independently re-derived here ↓, Multi-year execution risk on the cost program's remaining savings ↓
Measured by
Evidence for
- Income before taxes fell from $8.0B (2024) to $7.5B (2025) primarily due to higher intangible-asset impairment charges and increased R&D expense.[Pfizer Reports Solid Full-Year 2025 Results - Q4 2025 Earnings Release]· primary
Evidence against
- Pfizer raised its cumulative cost-savings target to $7.7B through 2027, with $4.5B already realized by end of 2025, a credible margin tailwind.[Pfizer, in sweeping cost cutting push, lifts overall savings target to $7.7B - FiercePharma]· secondary
Tax rate16.0%medium
How derived: Pfizer guided to roughly a 15% effective tax rate on adjusted income for 2026, up from 2025 whose GAAP rate was an anomalous -3.5% due to one-off items; the bear case assumes Pillar Two global minimum-tax phase-in and reduced credits push the normalized rate slightly above guidance to 16%.
Why this confidence: Explicit, reaffirmed company guidance for FY2026 tax rate ↑, Global minimum tax (Pillar Two) phase-in is an emerging risk not yet reflected in company guidance ↓
Measured by
- Company-guided adjusted effective tax rate15.0%reported
Evidence for
- Pfizer's FY2025 GAAP effective tax rate was -3.5%, an anomalously low, one-time-item-driven figure not representative of a steady-state rate.[Pfizer Reports Solid Full-Year 2025 Results - Q4 2025 Earnings Release]· primary
Evidence against
- Management has explicitly and consistently guided to approximately a 15% effective tax rate on adjusted income for 2026, reaffirmed through Q2 2026.[Pfizer Reports Strong First-Quarter Results And Reaffirms 2026 Guidance]· primary
Reinvestment rate15.0%medium
How derived: FY2025 capital expenditure was $5.35B against depreciation & amortization of $6.592B, i.e., capex already running below D&A; the bear case assumes Pfizer holds reinvestment at this minimal level (no major new M&A) as it prioritizes deleveraging and cost discipline over growth investment.
Why this confidence: Directly observable, reported FY2025 capex and D&A figures ↑, Does not capture potential bolt-on M&A spending, which has historically been material (Seagen, Metsera) ↓
Measured by
Evidence for
- FY2025 capex of $5.35B was already below FY2025 D&A of $6.592B, indicating a low reinvestment posture.[Pfizer Total Depreciation and Amortization - Cash Flow 2012-2026 - Macrotrends]· secondary
Evidence against
- Pfizer is planning 10 Phase III studies for its obesity candidate berobenatide, which could require reinvestment above the minimal bear assumption.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Terminal growth1.5%medium
How derived: With core small-molecule franchises facing structural generic erosion and the oral obesity candidate danuglipron discontinued (no near-term replacement growth engine at scale), the bear case caps terminal growth at 1.5%, below long-run US nominal GDP growth, reflecting a flat-to-shrinking mature pharma portfolio in perpetuity.
Why this confidence: Terminal-year assumptions are the least certain part of any DCF by construction ↓, Concrete, dated LOE and pipeline-discontinuation events ground the low estimate ↑
Measured by
Evidence for
- Pfizer discontinued development of danuglipron, its lead oral GLP-1 obesity candidate, in April 2025 after a potential drug-induced liver injury signal.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Evidence against
- Pfizer's successor candidate berobenatide is entering an aggressive 10-study Phase III program targeting first approvals around 2028, which could support above-GDP long-run growth if successful.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Base
medium confidence$45.95
IV / share
+59.5% vs $28.81
- Explicit cash flows
- $10.02
- Terminal value
- $46.83
- Net cash
- -$10.90
- Intrinsic value / share
- $45.95
101.9% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth-2.0% → -3.0% → 1.0% → 3.0% → 4.0%medium
How derived: Uses the midpoint of Pfizer's raised FY2026 guidance of $60.5-62.5B (about -2% vs. FY2025's $62.579B) as year 1; years 2-3 reflect Eliquis/Ibrance LOE erosion being progressively offset by the Seagen-driven oncology portfolio (20% operational growth, Padcev +39%) and cost-realignment-funded launches, settling into a normalized mid-single-digit growth rate by year 5 as the launched-and-acquired portfolio (+22% operationally in Q1 2026) becomes a larger share of the mix.
Why this confidence: Anchored directly to company-issued FY2026 guidance range ↑, Oncology growth rates are reported quarterly and consistent across recent prints ↑, Five-year path requires assuming the offset timing between LOE erosion and new-product ramp, which is a judgment call ↓
Measured by
Price implies: -7.2% vs our 0.6% — one of several sets that fit this price
Evidence for
- Pfizer's launched-and-acquired product portfolio (led by Seagen oncology assets) grew 22% operationally, with Padcev up 39%.[PFE Q1 Deep Dive: Oncology, Obesity Pipeline, and Legal Milestones Shape Outlook]· secondary
Evidence against
- Products facing 2026-2027 loss of exclusivity represented about one-third of 2024 revenue, a large base to replace within the forecast window.[Can Pfizer's New & Acquired Drugs Offset Its Looming Patent Cliff? - Yahoo Finance]· secondary
Operating margin32.0%medium
How derived: Blends the TTM GAAP margin (~19.5%) with Pfizer's $7.7B cumulative cost-savings target (of which $4.5B already realized by end-2025) being substantially achieved by 2027, moving normalized operating margin toward the low-to-mid 30s%, still below the ~40% adjusted margins Pfizer posted before pandemic-driven cost inflation and Seagen integration costs.
Why this confidence: Cost program has a multi-year track record of disclosed, incremental targets and realized savings ↑, Base uses non-GAAP/adjusted margin normalization that is not a single reported line item ↓
Measured by
Price implies: 22.4% vs our 32.0% — one of several sets that fit this price
Evidence for
- Pfizer has already realized $4.5B of a raised $7.7B cumulative net-savings target from its enterprise cost-realignment program.[Pfizer, in sweeping cost cutting push, lifts overall savings target to $7.7B - FiercePharma]· secondary
Evidence against
- TTM GAAP operating margin was still only about 19.5%, well below the assumed normalized 32% target, showing the gap that must be closed.[Pfizer Operating Margin 1986-2025 - Macrotrends]· secondary
Tax rate15.0%high
How derived: Pfizer guided to approximately a 15% effective tax rate on adjusted income for 2026 and has reaffirmed this through Q1 and Q2 2026; the base case takes this guidance at face value as the steady-state rate.
Why this confidence: Directly taken from explicit, repeatedly reaffirmed management guidance ↑, Historical volatility in Pfizer's reported tax rate shows guidance can still be missed ↓
Measured by
- Company-guided adjusted effective tax rate15.0%reported
Evidence for
- Pfizer's 2026 effective tax rate on adjusted income guidance of approximately 15% has been consistently reaffirmed through Q1 and Q2 2026.[Pfizer Reports Strong First-Quarter Results And Reaffirms 2026 Guidance]· primary
Evidence against
- Pfizer's FY2025 GAAP effective tax rate was an anomalous -3.5%, illustrating that reported tax rates can swing sharply year to year on one-off items.[Pfizer Reports Solid Full-Year 2025 Results - Q4 2025 Earnings Release]· primary
Reinvestment rate20.0%medium
How derived: Set above the current capex/D&A ratio (capex $5.35B vs. D&A $6.592B in FY2025) to reflect continued funding of the oncology and obesity pipeline (10 planned Phase III studies for berobenatide) and periodic bolt-on M&A consistent with recent deal-making (Seagen, Metsera), at a moderate pace consistent with the mid-single-digit long-run growth path.
Why this confidence: Combines a reported capex/D&A base with qualitative pipeline-funding disclosures ↓, Recent M&A pattern (Seagen, Metsera) is well documented, supporting continued inorganic reinvestment ↑
Measured by
Evidence for
- Pfizer is planning 10 Phase III studies for berobenatide across obesity and related conditions, implying sustained R&D reinvestment.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Evidence against
- FY2025 capex ($5.35B) was already below D&A ($6.592B), a data point that argues for a lower reinvestment rate than assumed here.[Pfizer Total Depreciation and Amortization - Cash Flow 2012-2026 - Macrotrends]· secondary
Terminal growth2.0%medium
How derived: With LOE erosion assumed to be fully offset by oncology and pipeline growth by the end of the forecast window, the base case sets terminal growth at roughly long-run US nominal GDP growth, consistent with a stabilized, diversified pharma portfolio neither shrinking nor structurally outgrowing the economy.
Why this confidence: Terminal assumptions are the least certain part of any DCF by construction ↓, Anchored to a standard macro proxy (long-run nominal GDP) rather than an aggressive company-specific extrapolation ↑
Measured by
Evidence for
- Pfizer's oncology franchise (Seagen assets) is already growing at 20% operationally, evidence of a credible replacement growth engine post-LOE.[PFE Q1 Deep Dive: Oncology, Obesity Pipeline, and Legal Milestones Shape Outlook]· secondary
Evidence against
- Management itself has noted the Seagen and Metsera deals are 'still some distance from paying off,' cautioning against assuming they fully offset LOE by the terminal year.[Pfizer 2026 guidance shows Metsera, Seagen deals will take time to pay off - CNBC]· secondary
Bull
low confidence$67.71
IV / share
+135.0% vs $28.81
- Explicit cash flows
- $11.78
- Terminal value
- $66.84
- Net cash
- -$10.90
- Intrinsic value / share
- $67.71
98.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth0.0% → 2.0% → 5.0% → 6.0% → 7.0%low
How derived: Assumes Pfizer beats the high end of FY2026 guidance (Q2 2026 already showed non-COVID revenue running about $1.5B ahead of prior expectations) so year 1 is flat rather than down; LOE erosion from Eliquis/Ibrance is more than offset from year 2 onward by the Seagen oncology franchise (20% operational growth, Padcev +39%, launched-and-acquired portfolio +22%) and by berobenatide's first approvals targeted from 2028, driving growth to 7% by year 5 as the mix shifts toward higher-growth specialty categories.
Why this confidence: Relies on a berobenatide obesity-drug approval and ramp that has not yet occurred (targeted ~2028) ↓, Extrapolates a single quarter's guidance beat into a multi-year acceleration ↓, Current oncology growth rates (20%+ operational) are actually reported, giving a real base to extrapolate from ↑
Measured by
Evidence for
- FY2026 revenue guidance was raised by $500 million at the midpoint on non-COVID products outperforming by approximately $1.5 billion.[Pfizer Reports Second-Quarter Results And Raises Midpoint of 2026 Revenue Guidance - Yahoo Finance]· secondary
Evidence against
- Pfizer's own management has cautioned the Seagen and Metsera deals will 'take time to pay off,' arguing against a rapid acceleration to 7% growth.[Pfizer 2026 guidance shows Metsera, Seagen deals will take time to pay off - CNBC]· secondary
Operating margin37.0%low
How derived: Assumes the $7.7B cost-realignment program is fully delivered and the oncology/specialty mix shift raises gross margin, bringing normalized operating margin back close to Pfizer's pre-2023 adjusted operating margins in the high-30s percent range.
Why this confidence: Assumes full delivery of a still-in-progress, multi-year cost program ↓, Gap between current GAAP margin (~19.5%) and the assumed 37% target is large ↓
Measured by
Evidence for
- Pfizer's cost program has already delivered $4.5B of net savings and management has repeatedly raised the target, now to $7.7B.[Pfizer, in sweeping cost cutting push, lifts overall savings target to $7.7B - FiercePharma]· secondary
Evidence against
- TTM GAAP operating margin was still only about 19.5%, roughly half the bull target, showing how far margins would need to expand.[Pfizer Operating Margin 1986-2025 - Macrotrends]· secondary
Tax rate13.0%low
How derived: Assumes Pfizer's guided ~15% 2026 adjusted tax rate improves via manufacturing/IP-location tax planning, consistent with the company's historically low effective tax rates before the 2025 anomaly.
Why this confidence: Directly contradicts current, explicit management guidance of ~15% ↓, 2025's negative rate shows favorable outcomes are at least possible for this company ↑
Measured by
- Company-guided adjusted effective tax rate15.0%reported
Evidence for
- Pfizer's FY2025 GAAP effective tax rate was actually negative (-3.5%), showing the company's tax planning can push its effective rate well below the current 15% adjusted guidance in favorable years.[Pfizer Reports Solid Full-Year 2025 Results - Q4 2025 Earnings Release]· primary
Evidence against
- Management's own guidance for 2026 is approximately 15%, not 13%, and it has been reaffirmed twice this year.[Pfizer Reports Strong First-Quarter Results And Reaffirms 2026 Guidance]· primary
Reinvestment rate28.0%low
How derived: Assumes aggressive reinvestment behind the 10-study berobenatide Phase III program and continued oncology bolt-on M&A (following the $43B Seagen and $10B Metsera deals), funding the higher growth path assumed in this case.
Why this confidence: Assumes a step-up in reinvestment intensity not yet visible in FY2025 actuals ↓, Grounded in a specific, disclosed 10-study Phase III program ↑
Measured by
Evidence for
- Pfizer plans 10 Phase III studies for berobenatide across obesity and obesity-related comorbidities, a significant R&D commitment.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Evidence against
- FY2025 capex ($5.35B) was already below D&A ($6.592B), the opposite direction from the aggressive reinvestment posture assumed here.[Pfizer Total Depreciation and Amortization - Cash Flow 2012-2026 - Macrotrends]· secondary
Terminal growth2.5%low
How derived: Assumes successful obesity and oncology pipeline execution (berobenatide approvals from ~2028, continued Seagen ADC scale-up) sustains above-GDP long-run growth for a diversified, innovation-driven Pfizer portfolio.
Why this confidence: Depends on a drug (berobenatide) that has not yet reported Phase III data or been approved ↓, Terminal-year assumptions carry the longest, least certain forecast horizon in the model ↓
Measured by
Evidence for
- Berobenatide's Phase III program targets the first of a series of potential approvals starting in 2028, giving a dated catalyst for above-GDP terminal growth.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Evidence against
- Pfizer's prior oral GLP-1 candidate, danuglipron, failed in development in April 2025, showing pipeline execution risk in this exact therapeutic area is real.[How Pfizer Is resetting its pipeline in oncology and obesity after COVID - Labiotech]· secondary
Valuation robustness
reliability of the estimate, not a stock rating45 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 102% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 31.2% | 1.06 | 126.8% | 5.71B | 1.0% |
| Q1 2025 | -7.8% | 0.31 | 357.8% | 5.71B | 0.2% |
| Q2 2025 | 10.3% | -0.21 | 50.5% | 5.71B | 0.2% |
| Q3 2025 | -5.9% | 0.7 | -34.1% | 5.71B | 0.2% |
| Q1 2026 | 5.4% | 0.38 | 22.6% | 5.73B | 0.4% |
| Q2 2026 | 2.6% | 0.05 | 125.2% | 5.7B | -0.1% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
Used the spot 10-year US Treasury constant-maturity yield as of September 4, 2026 as the risk-free rate, the standard CAPM input.
Used TradingView's reported beta coefficient for PFE as the CAPM systematic-risk input; other providers show a wide range (GuruFocus ~0.15-0.18, eToro ~0.38), consistent with Pfizer's defensive, high-dividend profile compressing its measured beta well below 1, so a value near the upper end of the observed range was used.
Used Aswath Damodaran's implied equity risk premium for the S&P 500 at the start of 2026 (forward-looking, derived from current index prices and expected cash flows) as the market ERP input.
Looked up Pfizer's most recent closing share price as the current market price input for the model.
Generated 9/6/2026, 11:21:20 AM · pipeline v1.2.0