Are You Overpaying For Pfizer Stock Versus Its Rivals?
Pfizer’s shares cost more than Johnson & Johnson’s for each dollar of reported profit, even after factoring in a loss quarter over the past year. Investors usually pay more for growth, yet Pfizer (PFE) had the weakest sales growth of the six companies in its peer group. Are you overpaying for Pfizer stock versus its rivals?
On Paper, Pfizer Costs More Than Johnson & Johnson
On reported earnings, Pfizer costs more. Pfizer trades at 37.8 times its past year of earnings, against 30.6 for Johnson & Johnson. That ratio is called the P/E.
Pfizer’s P/E comes with a warning, though. Its past year includes a loss quarter, so the figure does not compare cleanly with its rivals. In the second quarter of 2026, Pfizer booked a $4.3 billion non-cash write-down. Most of it followed a late-stage lung cancer trial that missed its main goal. Pfizer reported a loss of $0.04 a share for that quarter. With a loss quarter included, a year’s profit is smaller and the P/E is higher.
The sales figures are clean. Pfizer’s revenue was down 0.2% over the past year, while Johnson & Johnson’s was up 8.1%. Pfizer’s operating margin, the share of sales left as profit from running the business, was 26.7%. Johnson & Johnson’s was almost the same, at 26.8%.
| PFE | JNJ | MRK | ABBV | LLY | BMY | |
|---|---|---|---|---|---|---|
| Market Cap ($ Bil) | 163.7 | 644.1 | 368.7 | 465.8 | 1,057.2 | 128.4 |
| PE Ratio (LTM) | 37.8 | 30.6 | 116.2 | 73.8 | 39.6 | 13.8 |
| LTM Revenue Growth | -0.2% | 8.1% | 4.6% | 10.4% | 49.6% | 3.1% |
| LTM Operating Margin | 26.7% | 26.8% | 10.5% | 33.9% | 49.7% | 28.1% |
| 12M Stock Return | 29.4% | 52.2% | 95.6% | 23.0% | 64.5% | 49.3% |
Data as of 9/29/2026. P/E is on trailing twelve-month (LTM) earnings.
Note: Merck’s (MRK) reported P/E of 116.2 reflects a trailing loss quarter and significantly inflates its valuation multiple relative to underlying operational performance.
AbbVie and Eli Lilly both trade at higher P/Es than Pfizer, but both are growing. AbbVie’s sales rose 10.4% over the past year. Eli Lilly’s rose 49.6%. Pfizer trades at a higher reported P/E than Johnson & Johnson without that kind of growth. The price appears to assume that Pfizer’s newer drugs will make up for its shrinking COVID sales.
Pfizer’s Newer Drugs Are Growing As COVID Sales Shrink
Pfizer sells drugs and vaccines, and its Biopharma segment made up 98% of revenue in 2025.
In the second quarter of 2026, revenue was $15 billion, up 1% from a year earlier on an operational basis. Without COVID products, operational revenue growth was 5%. Sales of recently launched and acquired products reached $3.2 billion, up 18% operationally.
COVID sales are moving the other way. Management cut its 2026 COVID revenue forecast to about $4 billion, from $5 billion. Management said the rest of the business made up for every COVID shortfall against its internal forecast, allowing the company to raise its full-year guidance even as total revenue remains lower year-over-year.
When Will Pfizer’s Sales Start Growing Again?
Not in 2026, by management’s own forecast. Management now expects 2026 revenue of $60.5 billion to $62.5 billion. Even the top of that range is just below the $62.6 billion Pfizer reported for 2025. Any result in that range would mean another year of declining sales.
Pfizer expects most of its COVID vaccine sales toward year-end, in line with the vaccination season. So most of the COVID vaccine forecast falls in the fourth quarter. Because most COVID vaccine revenue lands in the fourth quarter, those year-end results will test both the strength of the seasonal vaccine market and whether newer drugs can provide enough ballast to hold total sales steady.
Management expects high single-digit growth after 2028, the year some Pfizer drugs lose exclusivity. Pfizer aims for risk-adjusted revenue growth averaging a high single-digit rate a year. That aim runs from the end of 2028 to the end of 2033.
At today’s price, Pfizer needs its newer drugs to keep outgrowing the fall in COVID sales. So far the record is mixed. Non-COVID sales are growing and management raised its forecast, but total sales are flat. If the newer drugs keep growing, the higher multiple has a basis. Pfizer’s reported multiple is inflated by that loss quarter, making it look pricier on paper than Johnson & Johnson’s. If those newer drugs stall, you would pay that higher multiple for a business that is still not growing.
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