Should you buy pharma stocks? Dr Reddy's, Pfizer - Target prices after Q4 results

Following the Q4FY26 earnings announcements, brokerages have revised their outlooks for pharmaceutical majors Dr Reddy's Laboratories Ltd and Pfizer Ltd. In the last session on Wednesday, Dr Reddy's and Pfizer, both declined 0.39% and 2.59% to close at Rs 1265.10 and Rs 4606.40, respectively.

Dr Reddy's Laboratories

Nirmal Bang noted that the Q4FY26 results fell short on both revenues and margins, which was primarily impacted by a "one-time shelf stock adjustment (SSA) in Lenalidomide, VAT-related provisions and impairment charges related to CAR-T and Eftilagimod alfa". 

Nirmal Bang maintained a 'Hold' rating on Dr Reddy's with a revised target price of Rs 1,298. The brokerage remains constructive on the company's branded generics and partnership-led strategy.

Following the results, PL Capital upgraded Dr Reddy's stock from 'Reduce' to 'Accumulate', setting a target price of Rs 1,400, noting, “DRRD has been investing cash flow from gRevlimid to build pipeline across peptides, biosimilars and GLP products; benefits of that should be visible from FY27.”

Pfizer

ICICI Direct maintained a 'Buy' rating with a target price of Rs 5,750. The firm highlighted that revenues grew, driven by established power brands such as Eliquis, Magnex, and Meronem. 

“We expect Revenues to grow at a CAGR of ~10% during FY26-28E. We also expect company to maintain ~+30% dividend payout as has been the case over the last few years,” ICICI Direct said.

Nirmal Bang retained a 'Hold' rating on Pfizer with a target price of Rs 5,182. “Revenues slightly missed NBIE estimates while the beat on margins was on account of improvement in product mix and reduction in employee expenses,” it said.