Pfizer Raises Profit Forecast Amid Patent Cliff Concerns: Buy or Sell?

Pfizer has raised its earnings outlook for the year to $3 per share at the midpoint of its guided range. The company's dividend payout has increased for 16 consecutive years, with a current yield of 7%. Despite upcoming patent cliffs for its top-selling products, Pfizer expects new drugs to generate $20 billion in annual revenue by 2030. The dividend yield is high due to concerns about the company's long-term business prospects.

Title: Pfizer Raises Earnings Outlook, but Patent Cliffs Pose Challenges

Pfizer Inc. (PFE) has recently raised its earnings outlook for the year, forecasting adjusted earnings of $3 per share at the midpoint of its guided range. This announcement comes on the heels of the company's second-quarter earnings report, which was released on August 5, 2025 [1]. Despite the positive earnings outlook, Pfizer faces significant challenges due to upcoming patent cliffs for its top-selling products, which could impact future earnings growth.

The pharmaceutical giant has been maintaining a consistent dividend payout for the past 16 consecutive years. The current dividend yield stands at 7%, which is notably high compared to its yield of about 3% in early 2022 [1]. This high yield is a result of investors' concerns about the company's long-term business prospects, particularly the impending patent cliffs that could significantly reduce revenue.

Pfizer expects new drugs it has acquired or licensed to generate $20 billion in annual revenue by 2030. This revenue stream is crucial for the company as it aims to replace the lost revenue from its patent-protected products. The company has been investing heavily in its next generation of blockbuster drugs, with significant acquisitions and licensing deals. For instance, in 2023, Pfizer invested approximately $43 billion in Seagen, an oncology therapy developer [1].

However, the next five years could be challenging for Pfizer. Several of its blockbuster drugs, such as Eliquis, are expected to face generic competition in the European Union and U.S. markets beginning in 2026 and 2028, respectively. The company's CEO, Albert Bourla, has indicated that this loss-of-exclusivity wave could reduce annual revenue by $17 billion to $18 billion between now and 2030 [1]. Despite these challenges, Pfizer's strong pipeline of new drugs and ongoing research and development efforts suggest that the company is well-positioned to maintain its dividend over the long term.

Investors should be cautious when considering Pfizer stock. While the company has a history of steady earnings and consistent dividend growth, the upcoming patent cliffs pose significant risks. It is essential to conduct thorough research and consider Pfizer as a small part of a diversified portfolio.

References
[1] https://www.fool.com/investing/2025/08/07/this-7-yielding-stock-just-raised-its-profit-forec/
[2] https://www.gurufocus.com/news/3049239/curevac-cvac-secures-740m-from-patent-settlement-with-pfizer-and-biontech
[3] https://www.aol.com/7-yielding-stock-just-raised-095700886.html