Down 63%, Should You Buy the Dip on Pfizer?

Justin Pope, The Motley Fool

Sat, May 24, 2025, 5:45 AM 5 min read

• Pfizer's woes range from a failed weight loss drug to tariffs and political uncertainty.

• Yet, Pfizer maintains a strong financial foundation and a promising pipeline.

• The stock's valuation is so low that even modest success could jumpstart the shares.

• 10 stocks we like better than Pfizer ›

It's been a tough go for Pfizer (NYSE: PFE). Shares of the pharmaceutical giant are down over 60% from their highs, a multi-year slide since pandemic-related sales peaked a few years ago. But that's not all. Now, new challenges are putting pressure on the stock.

Stocks aren't always on sale just because their prices went down, but Pfizer's storied history and 7.3% dividend yield make it worth checking under the hood to see if the company has what it takes to get back on track.

So, that's precisely what this Fool did. Here is why Pfizer can't seem to get off the mat and whether it's worth buying the dip on today.

I won't rehash Pfizer's pandemic journey too much. The company developed and sold a vaccine (Comirnaty) and an antiviral drug (Paxlovid) that made billions of dollars during COVID-19. Then, as those sales dried up, the company's top and bottom lines shrank, taking Pfizer's stock price down, too.

But that's old news. More recently, Pfizer has endured a barrage of additional bad news. The company ceased development of Danuglipron, an experimental weight loss pill after it potentially caused a liver injury in a patient. That was supposed to be Pfizer's entrance into one of healthcare's fastest-growing markets.

The political headaches are stacking up, too. New Secretary of Health and Human Services Robert F. Kennedy Jr. has been a vocal critic of the pharmaceutical industry and is no friend of Pfizer's. Earlier this month, President Trump issued an executive order to lower drug prices in the United States.

Then, you have potential tariff policies that could make it harder for Pfizer to strategize how it develops and manufactures its drugs. Lastly, Pfizer is anticipating a $1 billion revenue hit in 2025 due to Medicare changes stemming from the Biden Administration's Inflation Reduction Act.

Phew. It's a mouthful, but these problems seem more like paper cuts than fatal wounds.

Danuglipron's failure hurts, but Pfizer still has a healthy pipeline that will heavily focus on oncology over the coming years. Then there is the political noise, which investors shouldn't rush to panic over. For example, President Trump's executive order on drug prices lacked a clear framework for what drugs might be susceptible to pricing pressure or how exactly the government would force drug companies to comply.