Citi Maintains a Hold Rating on Pfizer (PFE) Amidst Pricing Policy Headwinds

On May 21, analyst Geoff Meacham of Citi maintained a Hold rating on Pfizer Inc. (NYSE:PFE), reiterating the price target of $25. The analyst acknowledged the strong Q1 2025 performance of the company. However, he remains cautious due to the potential Most Favored Nation (MFN) pricing policy headwinds.

The Most Favored Nation (MFN) pricing policy is a government initiative in the United States to lower prescription drug prices to ensure that the prices paid by US government programs do not exceed the lowest prices paid by comparable developed countries. This policy has resurfaced under the Trump administration in 2025. The Trump administration argues that this policy will result in US drug prices dropping by 30% to 80%.

During the first quarter 2025 earnings call, Dave Denton, CFO of Pfizer Inc. (NYSE:PFE), noted the changes in the IRA Medicare Part D redesign, tempered US revenue. The IRA Medicare Part D is another government initiative aimed at cutting drug prices. Analyst Meacham noted that although the company is actively pursuing opportunities in oncology and cardio-metabolic assets, the market remains overvalued. Thereby requiring a disciplined approach to business development. Moreover, the pricing policy headwinds present challenges that Pfizer Inc. (NYSE:PFE) has to navigate carefully, thereby justifying the Hold rating.

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