Bernstein: Pfizer beats expectations in the third quarter and raises guidance; long-term growth hinges on pipeline progress in 2027–2028

Where did third-quarter results outperform?

Pfizer’s third-quarter 2026 revenue was 16.583 billion dollars, about 4% above the market consensus of 15.923 billion dollars, but broadly flat compared with 16.654 billion dollars in the same period last year. Adjusted EPS was 0.87 dollars, about 18% above the consensus of 0.74 dollars.
Although R&D expenses were 4% above consensus, gross margin was about 128 basis points higher than consensus, helping drive operating profit to 5.908 billion dollars, 10% above consensus.

Sales of growth products rose 32% year over year, but accounted for only 23% of the base business, and their scale remains limited. Eliquis sales reached 2.523 billion dollars, up 25% year over year, contributing about half of the year-over-year increase for this group of growth products; Padcev sales were 720 million dollars, up 55% year over year.
Declines in some products offset growth: Prevnar vaccine franchise sales totaled 1.564 billion dollars, down 10% year over year; the Comirnaty COVID vaccine and Paxlovid treatment fell 30% and 63%, respectively, year over year.
Acquired products grew 37% in aggregate, and their contribution is increasing; however, the failure of a Seagen pipeline program has resulted in a 5 billion-dollar write-down, showing that inorganic growth also carries R&D program risks.

Pfizer raised its 2026 revenue guidance from 60.5 billion–62.5 billion dollars to 62 billion–64 billion dollars, increasing the midpoint by 1.5 billion dollars. It raised adjusted EPS guidance from 2.80–3.00 dollars to 2.95–3.05 dollars, while absorbing a related-to-Innovent expense of 0.10 dollars per share.
The company raised the midpoint of its full-year R&D expense guidance by 300 million dollars to 11.3 billion dollars, reflecting accelerated oncology and obesity research and development; its full-year outlook of about 4 billion dollars for the COVID business was unchanged.
Pfizer expects to achieve nearly all of its 7.2 billion-dollar net savings target by the end of 2026, and plans to save a further 2.5 billion dollars in 2027–2029. Bernstein believes the third-quarter beat and continued execution of the cost plan make the raised guidance look achievable.

Management maintained its target of risk-adjusted high-single-digit compound annual revenue growth from the end of 2028 through 2033. Bernstein believes this long-term growth story depends on successful pipeline progress in 2027–2028, especially in obesity, tivunatamig, and atirmociclib.
For obesity programs, 2026 has 10 Phase Three trials underway or planned; enrollment in the monthly-dosed VESPER-6 trial is about halfway complete, the Phase Two B bero/amylin study has completed enrollment, and the target for bero’s first potential approval remains 2028. Meanwhile, two obesity programs were discontinued in Phase One.
The release of MEVPRO-1 data has been moved to the first quarter of 2027, while data from the Metsera assets are expected to begin coming out in early 2028. Bernstein maintains its Market-Perform rating on Pfizer and a 29-dollar price target.