While the market was busy panicking about Iran and getting drunk on Palantir’s growth print, Pfizer slipped in a very competent earnings beat that almost no one is talking about.
Q1 2026 numbers from PFE:
- Revenue: $14.45 billion — up 5.4% YoY, beating consensus estimates
- Adjusted EPS: $0.75 — beat the $0.72 estimate by 3.9% (down from $0.92 last year, but consensus already accounted for the Covid cliff)
- Stock reaction: +1.6% on the day to $26.75
- FY 2026 guidance: Reaffirmed at $2.80–$3.00 adjusted EPS, $59.5B–$62.5B revenue
The story underneath the headline numbers is more interesting than the numbers themselves.
Sales of recently launched and acquired products grew 22% operationally during the quarter. The Eliquis blood thinner — a product PFE has been running on for years — kept the lights on. Together, those two drove enough offset to neutralize the continued decline in Covid vaccine and Paxlovid revenue. That’s the threshold that mattered for this print: did the post-Covid pipeline grow fast enough to offset the legacy decline?
Answer: yes, with room to spare.
Why this stock is a coiled spring
Pfizer trades at $26.75. Its FY26 EPS midpoint is $2.90. That’s a forward P/E of ~9.2x — one of the cheapest large-cap pharma multiples in the U.S. market. The dividend yield is roughly 6.4%, fully covered by the EPS guidance.
For context: Merck trades at ~14x. Eli Lilly at 50x+. AbbVie at ~16x. PFE is priced for “the dividend gets cut and the pipeline implodes.” Today’s print is evidence of neither.
The catalyst path here isn’t growth. It’s narrative repair. Each quarter that PFE delivers a clean beat, reaffirms guidance, and shows the launch portfolio growing 20%+ — the multiple gets a chance to creep back toward the pharma group average.
The Play
If you’re an income investor: PFE pays you to wait. The 6.4% yield is roughly double the 10-year Treasury, and the FY26 guide says it’s safe.
If you’re a value investor: There’s a multiple-rerating optionality embedded here. PFE doesn’t need to grow 10% — it needs to stop shrinking. Today says it has.
Hard exit signals: A guidance cut (would suggest the Covid cliff isn’t over) or a dividend reduction (would invalidate the income thesis entirely). Neither is on the radar today.
Boring isn’t always bad.