Pfizer Inc

Analyst thesis

Our recommendation is based on:

• Pfizer’s (PFE) oncology division, expanded by the US$43 billion Seagen acquisition in 2023, accounts for a third of group sales. Its lead drug, Padcev (an antibody-drug conjugate (ADC)-targeting bladder cancer), is tracking a $2.4 billion annualised sales run rate, with muscle-invasive bladder cancer (MIBC) label expansion underway. The ADC platform generates successive oncology drugs, each cheaper to develop than the previous. The base case projects a 50% uplift, valuing Seagen’s oncology revenue at $8–10 billion by 2030.

• The patent cliff downside case is improving: Vyndamax exclusivity has been extended to June 2031, and a favourable Belgian court ruling on Comirnaty contracts has reduced near-term risk on Covid vaccine revenues. Management has indicated that a high single-digit five-year revenue CAGR is possible post-2028.

• Optionality is effectively priced at zero: the Metsera’s obesity programme (10 phase‑2/3 assets with earliest approvals around 2028–2029), Atirmociclib as a credible Ibrance successor, and the early radiopharmaceuticals pipeline all sit outside our base‑case valuation. This is attractive because as the obesity market draws in more competitors, Pfizer is one of the few new entrants with the scale, leverage and commercial infrastructure to win a share of the market from incumbents that already trade on higher multiples and must defend their positions. Radiopharmaceuticals specifically are excluded from the valuation, as it remains in early‑stage clinical development with no near‑term revenue visibility.

• A dividend yield of more than 6% provides a valuation floor, underpinned by strong FCF generation and investment-grade balance sheet that supports maintaining the dividend through the deleveraging cycle.