Pfizer faces three headwinds that could weigh on its performance next year: first, it trails competitors in the lucrative GLP-1 weight-loss drug market after its $10 billion Metsera acquisition, with rivals already generating billions in sales; second, key blockbusters Ibrance, Eliquis and Vyndaqel will approach patent expiry between 2027 and 2028, threatening a projected combined annual revenue of more than $20 billion; and third, a dividend payout ratio approaching 100% could force a reduction of the company’s current annual payout of $1.72 per share if free cash flow cannot keep pace with obligations.

Analysts forecast fourth-quarter earnings per share of $0.57, down from $0.63 a year earlier, and revenue of $16.83 billion versus $17.76 billion in the prior period. The slowdown follows a post-pandemic normalization of demand for its Covid vaccine, which contributed over $30 billion in 2021 sales. Investors will focus on management’s guidance for 2026, particularly updates on the immunology and oncology pipeline that could offset near-term revenue declines.

With a yield near 6.6% and 15 consecutive years of increases, Pfizer’s annual dividend of $1.72 per share has been a draw for income investors. However, the payout now consumes nearly all distributable cash flow, raising the risk of a cut if expenses rise or product sales falter. Credit rating agencies have flagged the high payout ratio as a negative, noting that any adverse surprise from the patent expiries or R&D setbacks could pressure the company’s ability to maintain its dividend policy.