We recently published a list of 12 Best Affordable Stocks To Buy Right Now. In this article, we are going to take a look at where Pfizer Inc. (NYSE:PFE) stands against other best affordable stocks to buy.
Economic and Market Outlook 2025
There has been a growing debate regarding whether the economy of the United States will have a soft landing. A recent report by Vanguard titled “Beyond Landing” released on November 25 discusses the economic outlook for the year ahead. The report highlighted that global inflation has significantly decreased over the past two years, nearing the target of 2%. However, this decline has been inconsistent across different regions, with many developed markets experiencing slowdowns due to monetary policy adjustments. The United States stands out as an exception, showcasing robust economic growth and full employment despite restrictive monetary policies.
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The report raised critical questions about whether the US has achieved a “soft landing” or if high interest rates will eventually lead to a “hard landing.” The narrative has largely focused on the Federal Reserve’s ability to time rate cuts effectively to facilitate painless disinflation. Vanguard suggests that the strong growth and falling inflation in the US may be better explained by supply-side dynamics, such as increased labor productivity and a surge in available labor, rather than solely by Federal Reserve policies.
Regarding the 2025 outlook, the firm anticipates that US real GDP growth may decline from around 3% to closer to 2%, influenced by potential policy risks like trade tariffs and stricter immigration regulations. Core inflation is expected to remain above 2.5% for most of 2025. The firm also predicts that interest rates will stabilize at levels higher than those seen during the 2010s, fostering better returns in cash and fixed-income markets over the next decade. However, they express caution regarding equity markets due to elevated valuations. The report highlights a tension between momentum and valuation in risk assets, suggesting that while some stocks may continue to perform well, their high valuations could pose risks if economic conditions change unexpectedly.
A medical technician wearing protective gloves and a mask mixing a biopharmaceutical solution.
Our Methodology
To compile the list of the 12 best affordable stocks to buy right now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener we shortlisted stocks trading below a Forward P/E of 15, as of December 4, and that are expected to experience earnings growth this year. Next, we sorted our initial list by market capitalization and cross-checked the Forward P/E of each stock from Seeking Alpha and earnings growth from Yahoo Finance. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders as per Insider Monkey’s database for Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Pfizer Inc. (NYSE:PFE)
Forward P/E Ratio: 8.96
Earnings Growth This Year: 58.98%
Number of Hedge Fund Holders: 80
Pfizer Inc. (NYSE:PFE) is an international research-based biopharmaceutical company that operates through the discovery, development, manufacturing, and sale of pharmaceutical products segments. It focuses on oncology, primary care, and specialty care treatments and has a portfolio of more than 100 drugs, circulating internationally.
One might think that with COVID-19 vaccine demand subsiding, the glory days of this company are history. While it’s true that Pfizer Inc. (NYSE:PFE) grew its sales exponentially and generated $100 billion in 2022 on the back of COVID-19 vaccine sales, the company still has growth potential. Management sees opportunities in its oncology segment. The company acquired Seagen for $43 billion in 2023 and plans to develop eight potential cancer treatments by 2030.
Moreover, Pfizer Inc.’s (NYSE:PFE) recent third-quarter earnings release for fiscal 2024 also indicated robust performance, the company generated $17.7 Billion in revenue, up 32% year-over-year. Its oncology revenues were also impressive and improved by more than 31% during the same time.
In addition to its focus on becoming a market leader in oncology, management is also prioritizing cost saving and anticipates at least $4 billion in savings by the end of 2024 as part of its Cost Realignment Program. Considering its robust oncology pipeline and encouraging performance of its existing portfolio, Pfizer Inc.’s (NYSE:PFE) remains an attractive investment opportunity.
Parnassus Value Equity Fund stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
Overall, PFE ranks 6th on our list of best affordable stocks to buy right now. While we acknowledge the potential of PFE to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PFE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
