- 2024/25 guidance reaffirmed
- $1 billion impact from Inflation Reduction Act
- Expected to meet 3.25 leverage target by end of 2025
Embattled pharmaceutical firm Pfizer (PFE:NYSE) topped the S&P 500 index leaderboard on Tuesday (17 Dec), gaining 5% to $26.4 after confirming 2024 guidance and reaffirming 2025 forecasts in line with market expectations.
The positive share price reaction to meeting consensus expectations demonstrates just how much negative investor sentiment surrounds the company which has seen its shares more than halve in value since late 2021.
The underperformance has attracted the interest of activist investor Starboard, which has reportedly amassed a $1 billion stake, according to Bloomberg.
Starboard’s chief executive Jeff Smith has accused Pfizer of squandering its Covid gains and overspending on a series of acquisitions, including the $43 billion purchase of Seagen in 2023.
WHAT DID THE COMPANY SAY?
The company expects 2024 revenue in the range of $61 billion to $64 billion and adjusted EPS (earnings per share) of between $2.75 and $2.95 compared with consensus estimates of $2.93.
Pfizer is calling for 2025 revenue growth in the range of flat to 5% impacted by a net $1 billion hit from the Inflation Reduction Act. The company forecasts a ‘meaningful’ 10% to 18% operational growth in adjusted, diluted EPS, implying a range of $2.8 to $3, compared with a consensus expectation of $2.88.
Expected growth reflects higher revenue and an anticipated expansion in operating margin due to cost saving measures, with an additional $500 million of cost cuts announced on top of the approximately $4 billion cost realignment programme achieved through to the end of 2024.
CEO Albert Bourla stated: ‘Pfizer is in a strong position to continue making a positive impact for patients and delivering on our financial commitments in 2025. Our team will build on a year of disciplined execution in 2024 and our product portfolio remains strong.
‘Additionally, in support of our ongoing efforts to improve gross margin performance, we will work to make additional progress with our Manufacturing Optimization Program in the coming year.’
