Did you know that in just the past three years, healthcare giant Pfizer (PFE 1.02%) has lost approximately half its value? The stock surged during the pandemic as its COVID-19 vaccine and pill enabled it to generate record numbers. But in recent years, concerns about future growth and patent cliffs have weighed on its valuation.
The company has been working on trying to enhance its growth opportunities via acquisitions, but that hasn't been sufficient to turn things around for the stock -- not yet, anyway. However, there's one potentially lucrative growth opportunity that Pfizer's focusing on that could change things and drastically improve the stock's trajectory, perhaps as early as this year, and that's GLP-1 drugs.
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Pfizer has been making deals in the GLP-1 space
There have been numerous deals that Pfizer has been making in recent years, and one area that it looks to be particularly interested in of late is the development of GLP-1 drugs. Last month, the company announced a licensing deal with Chinese company YaoPharma worth up to $2.1 billion. It has a GLP-1 drug that is in its early stages of development. However, with the bulk of the deal tied to royalties and milestone payments, it's a relatively inexpensive way for Pfizer to grow its pipeline in the GLP-1 space.
Pfizer was involved in an even larger deal back in November when it agreed to acquire Metsera for up to $10 billion. Metsera doesn't have any approved drugs in its portfolio, but it has multiple assets that are in development, including MET-0971, which is in phase 2b trials. It's a bit further along, but it's still by no means a certainty that it'll obtain approval.
Why having an approved GLP-1 drug could be a game changer for Pfizer
If Pfizer ends up with an approved GLP-1 drug, or even if it looks to be making progress in clinical trials with the assets it acquires, that could give growth investors renewed hope in the company's potential. Experts at Grand View Research project that by 2033, the GLP-1 receptor agonist market could be worth over $200 billion, which is nearly three times the roughly $70 billion it was worth in 2025.
Investors only need to look at Eli Lilly's success to see the potential upside for a company involved in GLP-1 drug development. Eli Lilly hit a $1 trillion valuation last year, largely due to its strength in the GLP-1 market. It has approved GLP-1 treatments for diabetes (Mounjaro) and weight loss (Zepbound) that generate billions, and that have turned it into one of the best growth stocks in the healthcare sector.
NYSE: PFE
Key Data Points
Is Pfizer a good stock to buy in 2026?
Pfizer has taken a beating in recent years, and its market cap is now around $140 billion. But with the company still generating solid earnings numbers, its price-to-earnings multiple is relatively modest at around 15. By comparison, the average stock on the S&P 500 trades at 25 times its earnings.
There's some uncertainty ahead for Pfizer, but with the company making strategic moves in the GLP-1 space and other areas, including its mammoth $43 billion acquisition of oncology company Seagen in 2023, I'm optimistic that it can turn things around; it's just a matter of how long before that happens.
At a low valuation, investors are getting some good margin of safety with the stock, which can help keep the risk of investing in Pfizer today fairly low. Plus, its dividend, which yields 6.8%, certainly sweetens the deal and provides an incentive for being patient with the stock and simply hanging on for the long term.
If you're OK with some risk, Pfizer could be one of the better stocks to buy right now.
