Pfizer Inc. (NYSE:PFE) trades at a considerable discount to AbbVie Inc. (NYSE:ABBV), despite both companies reporting growth in important parts of their pharmaceutical portfolios. According to Yahoo Finance’s September 23, 2026 valuation snapshot, Pfizer trades at 9.67 times forward earnings, compared with AbbVie’s 16.39 times.
That makes Pfizer cheaper on a forward P/E basis, but their latest earnings reveal why the valuation gap deserves closer examination. AbbVie’s growth is already translating into higher companywide earnings, while Pfizer’s newer medicines are still working to offset weaker areas of its business. But before we get into the comparison, take a look at our ranking of the best healthcare stocks to buy according to hedge funds. Check out the complete list here for more insight into the sector.
Bull Case
AbbVie’s second-quarter performance provides a clear explanation for its premium. Revenue increased 10.2% year over year to $16.99 billion, while adjusted diluted earnings per share rose 22.9% to $3.65. Much of that growth came from Skyrizi and Rinvoq, which generated $5.51 billion and $2.53 billion in quarterly revenue, respectively. Both medicines recorded growth exceeding 24%, helping compensate for Humira’s continued decline.
The significance extends beyond individual product performance, as AbbVie Inc. (NYSE:ABBV) has demonstrated that its replacement medicines can generate enough revenue to support companywide expansion. That gives investors tangible evidence of earnings growth rather than depending primarily on future commercial opportunities. Read more extensively about AbbVie’s bull and bear case here.
Pfizer’s results tell a more complicated story, although there are encouraging developments. Its second-quarter revenue increased 3% to approximately $15 billion, representing 1% operational growth. Excluding its COVID-19 products, Comirnaty and Paxlovid, operational revenue increased 5%. More notably, Pfizer Inc. (NYSE:PFE) reported 18% operational growth from its launched and acquired products. Individual medicines also demonstrated momentum, with Eliquis revenue increasing 19% operationally, Padcev growing 23%, and Lorbrena climbing 37%.
These results indicate that Pfizer’s discounted valuation does not reflect an absence of growing products. Instead, the challenge is that their contributions have not yet produced substantial growth across the entire company. We meticulously crafted a list of the 7 Best Pharma Stocks to Invest In Now. Access the complete list here.
Bear Case
Pfizer’s earnings illustrate that difficulty. Second-quarter adjusted diluted EPS was $0.77, compared with $0.78 a year earlier, despite higher revenue. For the first six months of 2026, adjusted diluted EPS and adjusted income both declined approximately 10%.
The company reported a quarterly GAAP loss of $0.04 per share, reflecting $4.3 billion in noncash intangible asset impairments. Management raised the midpoint of its annual revenue guidance by $500 million to $61.5 billion while maintaining adjusted EPS guidance of $2.80–$3.00.
The guidance revision is revealing in this context. Pfizer Inc. (NYSE:PFE) attributed approximately $1.5 billion of improvement to non-COVID products, offset by a $1 billion reduction in expected COVID-related revenue. Its underlying medicines are performing better, but weakness elsewhere continues to dilute that progress.
AbbVie has its own vulnerabilities. Skyrizi and Rinvoq now represent approximately 47% of quarterly revenue, which increases the importance of sustaining growth in those medicines. Meanwhile, its oncology revenue declined 1.5% in the second quarter. Keep up with the healthcare sector through our insightful articles covering bull and bear cases. Along with BMY, read our insightful article on Danaher Has Barely Moved in a Year. Is its 25x Earnings Valuation Justified?
What Does the Valuation Gap Tell Investors?
The contrast is ultimately about how much growth is reaching the bottom line. AbbVie’s premium is supported by stronger current revenue and adjusted earnings growth. Pfizer’s lower multiple reflects a business where expanding product franchises coexist with relatively flat quarterly adjusted earnings.
However, Pfizer’s 18% growth in launched and acquired products suggests that its underlying portfolio is changing faster than its headline results indicate. The next important measure is whether that momentum can lift companywide earnings, rather than simply offset declines elsewhere.
For now, the data shows why AbbVie Inc. (NYSE:ABBV) commands a premium, and why Pfizer’s discount remains an interesting question rather than definitive evidence of undervaluation.
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This article is originally published at Insider Monkey.
