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Pfizer (PFE, Financial) has said it expects its 2025 revenue and earnings to match market consensus, even as it predicts such a redesign of federal drug benefits will hit it with a $1 billion hit. This comes on the heels of positive third-quarter results and an upward revision of its outlook for 2024 just two months ago, the New York-based pharmaceutical giant provided its guidance.
Following the news, shares of the pharmaceutical company rallied 4% at the start of the trading day
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Investor Starboard Value has been pressing for changes at McDonald's (MCD, Financial), and the company's latest projections come as it faces more intense pressure. The investment firm has attacked Pfizer for its research and acquisitions and for what it calls bad decisions, which it says have sapped billions in shareholder value. Yet, Pfizer's resilient performance in the robust third quarter, despite the company reporting strong operational results as well as growth in key segments, is a testament to its resilience.
While the pharmaceutical industry readies itself for new federal policies for drug pricing and benefits, Pfizer's revenue forecast signals stability. The $1 billion blow, meanwhile, comes from curbing the cost of higher doses, one of the first effects of the government overhauling the structure of Medicare's drug benefitdesigned to help consumers but a problem for pharmaceutical companies.
The drugmaker continues to work on its pipeline and inspire confidence in investors. Pfizer's recent upward revision for 2024, which resulted from very promising developments in its core therapies and vaccines, underscores its strategic position in a competitive environment.
Pfizer, meanwhile, is facing pressures on all fronts, from activist scrutiny and regulatory shifts, but its outlook is cautious optimism. With a challenging macroeconomic environment in place, analysts are closely following the company's execution in continuing to drive innovation and deliver a consistent shareholder return.
This article first appeared on GuruFocus.