Pfizer Tumbles 2.86 as Patent Lawsuit Drags Down 74th-Ranked $830M Volume Amid Undervaluation Hopes

Pfizer Inc. (PFE) fell 2.86% on August 25, 2025, with a trading volume of $0.83 billion, ranking 74th in market activity. The decline followed a patent lawsuit filed by Enanta Pharmaceuticals against Pfizer’s Paxlovid antiviral in 18 EU countries, raising concerns over potential revenue impacts and litigation costs. While the lawsuit does not immediately disrupt operations, it adds pressure to an already challenging European market for the company.

Analysts noted that Pfizer’s valuation has drawn attention as its stock trades at a discount to peers. A valuation narrative from Francisco suggests the stock is undervalued by 15.5% relative to fair value, citing strengths in its oncology pipeline and recent acquisitions, including Seagen. Positive clinical trial results for PADCEV and consistent dividend increases have partially offset worries about patent expirations and revenue declines in legacy products. However, risks such as high debt levels and potential dividend cuts remain critical for long-term investors.

The SWS DCF model also indicates undervaluation, projecting a fair value of $30.62 per share. This aligns with broader market skepticism about Pfizer’s growth trajectory, particularly as key drugs face patent cliffs. Despite these challenges, the company’s cost-cutting initiatives and a robust late-stage pipeline offer some optimism. The stock’s forward P/E ratio of 8.3 further highlights its appeal as a value play, though investors must weigh its reliance on new product success.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered a CAGR of 6.98% during the backtest period. However, the approach experienced a maximum drawdown of 15.46%, underscoring the volatility inherent in high-volume trading strategies. The results highlight the balance between steady growth and the need for risk mitigation in such portfolios.