"Pfizer (NYSE:PFE) shares are finally starting to attract attention after gaining close to 7% in a single trading session on news that it's reached a pricing deal with the Trump administration. Indeed, this is the biggest up day for shares of PFE in recent memory. And while investors are upbeat on the pricing plan, I do think that income investors should focus on the longer-term opportunity at hand."
"TrumpRX has moved the needle for PFE stock. Could more similar deals be on the horizon for other drugmakers? In any case, I think the latest spike in PFE stock is just the start of a sustained run back to higher levels, especially as "TrumpRX" looks to give Pfizer a much-needed boost after spending most of the last year falling further into the abyss."
A pricing deal with the Trump administration produced a near-term 7% surge in Pfizer shares and marked the largest one-day gain in recent memory. The share rally compressed the dividend yield to about 6.75%, and the dividend remains well covered. Medicaid price cuts under the agreement could reduce margins, while tariff relief over the next three years should provide offsetting benefits. Some drugs could see up to an 85% price reduction. Other pharmaceutical firms may pursue similar deals, and investors may consider buying on a pullback toward approximately $24 per share.
Read at 24/7 Wall St.
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