Pfizer's Patent Cliff and Obesity Delay Reinforce Cautious Outlook, But DeepValue Sees Value in Execution-Dependent Turnaround

What happened

A Seeking Alpha article published on February 9, 2026, reiterates a 'Hold' rating for Pfizer, highlighting a $1.5 billion patent cliff in 2026 and declining COVID-19 revenues as immediate headwinds. The article notes that Pfizer's long-acting GLP-1 obesity program, bolstered by the Metsera acquisition, shows promise but lacks approval until at least 2028, delaying potential growth. In contrast, the DeepValue master report maintains a 'POTENTIAL BUY' rating, arguing that at around $26 per share, the stock trades at 8-9x forward EPS with a 6.6% dividend yield, pricing in these known challenges. The report emphasizes that Pfizer's $7.2 billion net cost savings plan and mid-single-digit oncology growth should stabilize adjusted EPS at $2.80-$3.00 and de-risk the dividend over the next 6-18 months. Thus, while the article underscores near-term risks, the DeepValue thesis hinges on successful execution of cost control and oncology performance to drive modest re-rating.

Implication

The $1.5 billion patent cliff in 2026 and ongoing COVID-19 revenue decline require Pfizer to rigorously execute its $7.2 billion cost savings plan to maintain EPS guidance and avoid dividend coverage issues. Oncology growth, particularly from Seagen assets, must sustain mid-single-digit rates to partially offset revenue erosion and validate the investment thesis amid a competitive landscape. Obesity pipeline optionality via Metsera remains a long-term story with no near-term revenue impact, emphasizing that near-term catalysts are absent until at least 2028. Dividend sustainability relies on free cash flow covering payouts, which is currently tight at a 93% payout ratio, leaving little margin for error in cost management or revenue declines. Overall, the stock offers value for patient investors if execution aligns with guidance, but it remains a high-risk, 'show-me' turnaround with significant downside if key metrics disappoint.

Thesis delta

The new article does not shift the core DeepValue thesis, as it echoes known headwinds already embedded in the analysis, such as the patent cliff and delayed obesity approvals. However, it reinforces the critical need for Pfizer to deliver on cost savings and oncology growth in the near term to navigate the 2026 challenges. The thesis remains intact if quarterly results confirm EPS guidance and oncology trends, but any deviation could quickly downgrade the rating to neutral or increase downside risk.