Pfizer's 2Q26 results are expected to be broadly in line, but the market focus has shifted to COVID weakness, capital allocation, and 2H26 pipeline readouts

Overview

This report is Goldman Sachs' preview of Pfizer Inc.'s 2Q26 earnings. The report believes the company's 2Q26 results, to be announced on August 4, will most likely be broadly in line with expectations overall, but COVID-related products remain weak, and Paxlovid may post the below-expectation performance that the market has already widely anticipated. More than the single-quarter results, investors are focused on whether the company can restore confidence in the pipeline through key 2H26 clinical readouts, capital allocation, and business development transactions.

Core views

Goldman Sachs' core view is that Pfizer's current valuation is low, but low valuation alone is insufficient to drive a re-rating, as the recent CFO departure, pipeline setbacks, and weak COVID demand continue to weigh on sentiment. In the short term, 2Q26 may continue the trend of steady operational execution; in the medium term, the Phase 3 MEVPRO-1 readout for mevrometostat, GLP-1/amylin combination data, BD activity, and dividend policy messaging will matter more than single-quarter revenue and EPS.

Analysis framework

The report mainly uses an earnings preview, product-line breakdown, prescription trend analysis, peer and consensus comparison, clinical catalyst scenario analysis, and a valuation multiple approach. Goldman Sachs compares its 2Q26 revenue and profit expectations with market consensus and analyzes year-over-year drivers for Paxlovid, Xeljanz, Eliquis, Vyndaqel/Vyndamax, Padcev, and Seagen products one by one, while deriving the 12-month target price using a 9.0x P/E multiple.

Methodology notes

• Valuation methodsP/E multiple valuation

  9.0x P/E multiple applied to Q5-Q8 adjusted EPS

  Goldman Sachs applies a 9.0x multiple to adjusted EPS for the fifth through eighth future quarters to derive a 12-month target price of $26; the report also notes that each 0.25x change in the P/E multiple corresponds to about a positive or negative 3% impact on the share price.

• Product and revenue analysisProduct sales model and prescription trend tracking

  Breakdown of 2Q26 revenue drivers by major drugs and business lines

  The report separately analyzes the year-over-year base, patent expiry, prescription volume, and pricing factors for COVID, Xeljanz, Xtandi, Eliquis, Vyndaqel/Vyndamax, Padcev, and Seagen products.

• Clinical catalystsMEVPRO-1 readout scenario analysis

  Impact of the Phase 3 mevrometostat readout on valuation and investor confidence

  The report views MEVPRO-1 as a key 2H26 event, believing the statistical hurdle can likely be met, but control-arm performance and crossover-treatment dynamics are important swing factors.

• Research frameworkGS Factor Profile

  Comparing stock characteristics across growth, financial returns, valuation multiples, and integrated factors

  Goldman Sachs discloses that its factor framework uses standardized rankings to assess Growth, Financial Returns, Multiple, and Integrated characteristics to provide investment context for the stock.

• M&A assessmentM&A Rank

  Rating covered companies from 1 to 3 based on likelihood of being acquired

  Goldman Sachs discloses that its M&A framework combines qualitative and quantitative factors to assess the probability of a company becoming an acquisition target; a rating of 3 is typically not included in the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• PFE.US

  Subject company of the report and the rated stock

  Strengths

  Valuation is below peers, operating execution is relatively stable, an approximately 7% dividend yield provides some support, and Goldman Sachs sees upside versus consensus for Eliquis and Padcev.

  Weaknesses

  The COVID franchise is weak, the stock has underperformed the DRG index year to date, the CFO transition and recent pipeline setbacks weigh on market confidence, and dividend coverage pressure on free cash flow is relatively high.

  Comparison

  PFE's 2027 forward P/E is about 8.75x, below the pharma peer average of 14.5x and median of 14x; year to date it is +0.4%, below DRG's +10%.

  Risks

  Failure of late-stage pipeline readouts, deterioration in the commercial and regulatory environment for vaccines, tariff impact on margins, COVID demand below guidance, and dividend sustainability concerns.

• Eliquis

  Pfizer product revenue driver

  Strengths

  Goldman Sachs expects FY26 sales of $8.7bn, above market consensus of $8.3bn, supported by BMY's comments on a 10%-15% YoY growth range and net price benefits.

  Weaknesses

  Relies on partner commentary and future net price realization, with some benefits possibly not appearing until after 3Q26.

  Comparison

  Goldman Sachs forecast is $0.4bn above Consensus.

  Risks

  Growth coming in below BMY's indicated range or net price benefits not materializing as expected.

• Padcev

  Growth driver related to Pfizer's oncology business and Seagen assets

  Strengths

  IQVIA data show the growth inflection continues, the EV-303 population continues to ramp, and the EV-304 population was recently approved.

  Weaknesses

  A wholesaler transition in 2Q25 created a one-time sales base effect, which may pressure year-over-year comparisons.

  Comparison

  Goldman Sachs FY26 estimate is $2.7bn, above Consensus at $2.5bn.

  Risks

  Ramp-up may be slower than expected or base effects may obscure true growth.

• mevrometostat

  Key 2H26 clinical catalyst

  Strengths

  Early combination data versus historical controls show relatively favorable rPFS and PSA50, and tolerability has improved through dose and administration adjustments.

  Weaknesses

  Still requires validation in the Phase 3 MEVPRO-1 trial, and control-arm performance and crossover-treatment dynamics may affect interpretation of the results.

  Comparison

  In the early cohort, median rPFS in Cohort 2A was 14.3 months, versus the physician-choice historical reference of about 6-8 months mentioned in the report; Pluvicto had mPFS of 11.6 months in the Phase 3 PSMAfore mCRPC study.

  Risks

  If the readout fails, it may weaken investor confidence in Pfizer's late-stage pipeline and compress the valuation multiple.

Key data

• 12-month target price$26Based on a 9.0x multiple applied to Q5-Q8 adjusted EPS.
• Disclosed price$25.01Pfizer Inc. price listed in the company-specific disclosure.
• 2026/2027/2028 adjusted EPS forecasts$2.99/$2.96/$2.57Previous forecasts were $2.99/$2.95/$2.56; this update incorporates recent prescription trends and the latest developments.
• PFE valuation8.75x 2027P/EBelow the pharma peer average of 14.5x and median of 14x.
• Year-to-date performance+0.4% vs DRG +10%PFE stock performance has significantly lagged the pharma peer index.
• FY26 COVID franchise guidance and expectationsCompany guidance $5bn; GS/Consensus $4.1bn/$4.5bnCOVID incidence and wastewater virus activity are low, and related prescription trends have declined sharply both year over year and quarter over quarter.
• Paxlovid/COVID prescription trendsTRx YoY -77%, QoQ -72%The report notes that historical pricing and inventory factors create volatility in the data, but overall they indicate weak demand.
• Eliquis FY26 expectationsGS $8.7bn vs Consensus $8.3bnGoldman Sachs believes BMY's comments on a 10%-15% growth range for Eliquis and net price benefits starting in 3Q26 may not yet be fully reflected in consensus.
• Padcev FY26 expectationsGS $2.7bn vs Consensus $2.5bnIQVIA data suggest the growth inflection seen in 1Q26 continued into 2Q26, supported by expansion in the EV-303 and EV-304 populations.
• BD capacity约$7bnBefore the global licensing and collaboration deal with Innovent, the company had about $7bn of remaining BD capacity.
• IPR&D related to the Innovent deal$650mnExpected acquired IPR&D from a milestone payment in 3Q26.
• Dividend yield约7%Provides some support for the stock price, but investor discussion around dividend sustainability is intensifying.
• 2025 dividend payout pressureDividend payments were 108% of free cash flow after capexThe median for US and European pharma peers is 64%.
• Potential share-price impact of MEVPRO-1约正负3%Goldman Sachs believes the mevrometostat readout could affect valuation through changes in the P/E multiple.
• mevrometostat Visible Alpha 2035 sales data$3.2bn/$1.5bnThese are global sales consensus figures before and after adjustment, respectively.

Impact & implications

For investors, if PFE's near-term results merely meet expectations, that may be insufficient to change the current dynamic of low valuation but low confidence. The bullish scenario comes from Padcev, Eliquis, cost savings, the oncology pipeline, and stability in the vaccine business; the bearish scenario includes continued weakness in COVID and vaccines, further late-stage pipeline failures, tariff pressure, and controversy over dividend cash flow coverage. The report implies that the market's pricing focus for Pfizer has shifted from quarterly EPS to pipeline credibility, capital allocation discipline, and whether management can stabilize investor expectations.

Risks

• Setbacks in late-stage pipeline assets could lower long-term estimates and lead to further valuation multiple compression.
• Regulatory or commercial prospects for the COVID and vaccine businesses weaker than expected could continue to drag on revenue and market sentiment.
• Tariffs could have a greater-than-covered impact on the company's profit line because Pfizer's gross margin is below the average level.
• Dividend payments place relatively high pressure on free cash flow coverage; if management's messaging is insufficient, it could intensify market concerns about dividend sustainability.
• The CFO departure and interim CFO transition may reduce market confidence in guidance upgrades or capital allocation execution.
• If the MEVPRO-1 readout comes in below expectations, it could lead to an approximately 3% or greater negative valuation swing.

What to watch

• Whether the August 4 2Q26 results are broadly in line with expectations overall, especially whether Paxlovid and the COVID franchise come in below GS and consensus.
• Whether management maintains, raises, or adjusts FY26 revenue guidance, particularly the $5bn COVID franchise guidance.
• Whether the company's messaging on financial discipline, guidance strategy, and dividend policy remains consistent following the CFO transition.
• The Phase 3 MEVPRO-1 readout, mevrometostat's efficacy and tolerability in mCRPC, and control-arm performance.
• The 2H26 Ph1/2 readout for the GLP-1/amylin combination.
• Signals of BD activity, especially how the approximately $7bn of BD capacity will be used for bolstering core therapeutic areas or for larger-scale transactions.
• Prescription trends and year-over-year base effects for Eliquis, Padcev, Vyndaqel/Vyndamax, Xeljanz, and Seagen products.