Pfizer (PFE) — Earnings Preview Memo
Key Points
| Topic | Details |
|---|---|
| Next Report Focus | Q2 2026 results: consensus revenue $14,402M, consensus EPS (GAAP) $0.45 |
| Guidance | FY2026 reaffirmed: revenue $59,500M–$62,500M, adjusted EPS $2.80–$3.00 |
| Last Year’s Comp | Q2 2025 reported revenue $13,531M, GAAP EPS $0.36; Q2 2025 adjusted EPS $0.78 |
| YoY Comparison | Q2 2026 faces a relatively easy comp (+6% consensus revenue growth vs. Q2 2025 actuals) |
| Key Watch Items | Non-COVID portfolio growth, obesity pipeline progress, oncology launches, cost controls |
| Intra-Quarter Trends | Q1 2026 non-COVID revenue +7% YoY, launched/acquired products +22% YoY |
| Guidance Risks | COVID franchise derisked at $5B for FY26; LOE headwinds ($1.5B impact in FY26) |
Summary and Conclusions
- Pfizer enters Q2 2026 earnings with positive momentum: Q1 2026 beat expectations, driven by strong non-COVID portfolio growth (+7% YoY) and robust performance from launched/acquired products (+22% YoY).
- Guidance is unchanged and credible: FY2026 revenue guidance ($59.5B–$62.5B) and adjusted EPS ($2.80–$3.00) were reaffirmed after Q1, with management signaling upside pressure to the non-COVID business but caution on COVID volatility.
- Year-over-year comparison is favorable: Q2 2026 consensus revenue ($14,402M) implies +6% YoY growth vs. Q2 2025 actuals ($13,531M), with easier comps due to COVID declines last year.
- Key factors to watch:
- Execution on non-COVID portfolio (Padcev, Eliquis, Nurtec, Vyndaqel, Lorbrena)
- Uptake and clinical progress of obesity/Metsera pipeline (berobenatide, amylin combo)
- Oncology catalysts (Padcev, Elrexfio, SV, CDK4, PD-1/VEGF bispecifics)
- Cost discipline and margin trajectory (mid-70s gross margin targeted)
- Impact of recent Vyndamax patent settlement (delays U.S. LOE to 2031)
- Capital allocation (dividend maintenance, $7B BD capacity, no buybacks expected near-term)
- Management tone is confident: CEO and CFO have repeatedly highlighted strong execution, pipeline momentum, and a clear path to high single-digit revenue CAGR post-2028.
Forward Consensus and Guidance Table
Q2 2026 Consensus vs. Prior Year Actuals
| Metric | Q2 2026E (Consensus) | Q2 2025 (Actual) | YoY Change | Notes |
|---|---|---|---|---|
| Revenue ($M) | 14,402 | 13,531 | +6% | Consensus from company data |
| Gross Margin (%) | 75.9 | 77.6 | -1.7 pts | Consensus vs. Q2 2025 actual |
| EBITDA ($M) | 6,032 | 5,487 | +10% | Consensus |
| Net Income ($M) | 3,890 | 3,306 | +18% | Consensus |
| EPS (GAAP) | $0.45 | $0.36 | +25% | Consensus |
| Cash Flow/Share ($) | $0.69 | Consensus |
FY2026 Guidance (Reaffirmed May 2026)
| Metric | FY2026 Guidance | Context/Notes |
|---|---|---|
| Revenue ($M) | $59,500–$62,500 | Includes ~$5B COVID, -$1.5B LOE impact |
| Adjusted SI&A ($M) | $12,500–$13,500 | Down ~4% YoY at midpoint |
| Adjusted R&D ($M) | $10,500–$11,500 | Up YoY, reflects obesity/oncology investment |
| Adjusted EPS | $2.80–$3.00 | Midpoint $2.90; includes $0.22 dilution from BD |
| Effective Tax Rate | ~15% | Up from 12.7% in FY25 |
| Gross Margin (%) | Mid-70s | Excludes Comirnaty profit split |
| Share Repurchases | None anticipated | $3.3B authorization remains |
| Dividend | Maintained at $0.43/qtr | Commitment to maintain and grow over time |
Q2 2026 Preview: What to Watch
1. Non-COVID Portfolio Growth- Q1 2026 non-COVID revenue grew +7% YoY; consensus expects continued strength in Q2.
- Launched/acquired products (Padcev, Eliquis, Nurtec, Vyndaqel, Lorbrena) are key drivers; Q1 saw +22% YoY growth.
- Vyndaqel/Vyndamax: International growth strong; U.S. facing price erosion but patent settlement delays LOE to 2031.
2. Obesity Pipeline Progress- Berobenatide (monthly GLP-1): Phase IIb data at ADA showed efficacy on par with tirzepatide, favorable tolerability, and monthly dosing convenience.
- 10 Phase III studies for berobenatide advancing in 2026; first approvals targeted for 2028.
- Amylin combo (3945): Early data expected later in 2026; potential for category-leading weight loss.
3. Oncology Catalysts- Padcev: Expanded indications in muscle-invasive bladder cancer; new standard of care potential.
- Elrexfio: Positive Phase III MagnetisMM-5 readout in RRMM; expanding earlier-line use.
- SV (sigvotatug vedotin): Second-line NSCLC readout imminent; first-line combo with pembro in 2027.
- PD-1/VEGF bispecific (4404): Multiple Phase III starts; early data suggest best-in-class potential.
4. Cost Controls and Margins- Gross margin: Q1 2026 at 76%, mid-70s targeted for FY26.
- Cost savings: $7.2B net savings targeted by end of 2026; SI&A and R&D both tightly managed.
- R&D spend: Up YoY, reflecting pipeline prioritization (obesity, oncology, vaccines).
