Pfizer Inc. (NYSE: PFE) chief executive Albert Bourla says uncertainty related to higher tariffs on pharmaceutical imports under the Trump administration is discouraging the company from investing in the US.
Without the tariff uncertainty, the multinational could have made “tremendous investments” in research and development (R&D) as well as manufacturing in the US this year, he revealed on the company’s earnings call on Tuesday.
Pfizer saw its revenue decline by 8% on a year-over-year basis in its fiscal Q1.
Still, the firm’s per-share earnings at 92 cents handily topped Street estimates for its recently concluded quarter.
At writing, PFE shares are down some 12% versus their year-to-date high in early January.
Why is Pfizer refraining from boosting investments in the US?
According to Albert Bourla, the pharmaceutical behemoth wishes to “control its costs” and be “frugal with its investments,” like any other business would in times of uncertainty.
Pfizer would want more clarity around tariffs from the White House before it decides on increasing its R&D and manufacturing investments in the US, he added on the call.
While the Trump administration has made moves on the tax front, they haven’t made the US particularly more appealing for businesses, argued the company’s chief executive, adding further incentives and clarity on tariffs are needed to make them invest in the United States.
Note that Pfizer stock has gained more than 10% in recent weeks.
PFE’s full-year guidance does not factor in the tariffs’ impact
On Tuesday, Pfizer Inc. left its full-year guidance unchanged at $61 billion to $64 billion in sales.
However, CEO Bourla confirmed in the earnings release that the outlook “does not currently include any potential impact related to future tariffs and trade policy changes, which we’re unable to predict at this time.”
PFE’s previous expectation was for its ongoing cost cuts to deliver up to $4.5 billion of net cost savings by the end of this year.
However, the pharma giant now sees an additional $1.2 billion of savings emerging by late 2027.
That’s on top of a separate multiyear initiative Pfizer has in place to lower costs that it expects will deliver savings worth $1.5 billion over the next three years.
What Wall Street expects from Pfizer stock in 2025
All in all, Pfizer’s earnings release this morning helped strengthen analysts’ confidence in what the future holds for the NYSE-listed firm.
Heading into Tuesday, Wall Street had a consensus “overweight” rating on Pfizer stock.
Analysts had an average price target of $27.67 on PFE shares, which indicates potential upside of about 15% from current levels.
Additionally, the multinational based out of New York currently pays a rather lucrative dividend yield of 7.19%, which makes it incredibly attractive for global income investors in 2025.
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