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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (5321)	8/31/1998 4:45:00 PM
From: BigKNY3	Read Replies (2) \| Respond to of 9523

Brutal day: Here's what Big Pharma analysts had to say today. BigKNY3 Drug Stocks: Merck & Co. Leading Downturn In Group 08/31/98 Dow Jones One analyst attributed Monday's sharp decline in drug stocks to profit-taking. "I think people are just trying to lock in profits on the group," said ABN Amro analyst James Keeney. Others noted that shares of drug companies with the lowest price-earnings ratios in their peer group were under less pressure Monday than other drug stocks. That includes Johnson & Johnson (JNJ), recently trading off 4 7/8, or 6.6%, and Abbott Laboratories (ABT), recently trading off 3 1/4, or 7.8%. The companies in the sector with higher-price earnings ratios have had more compression in Monday's trading session, analysts said. Those stocks include Pfizer Inc. (PFE), recently off 7 5/8, or 7.4%, Warner Lambert Co. (WLA), recently off 8 3/8, or 11.2%, Schering-Plough Corp. (SGP), off 7 3/8, or 7.7%, and Eli Lilly & Co. (LLY), off 6 7/8, or 9.5%. Drug giant Merck & Co. (MRK) was recently trading lower than all of its peers, off 11 1/2, or 9%. "Some of the drug stocks that have already been lagging are having less of a downturn," said Sovereign Asset Management analyst Paspal, whose fund holds positions in Abbott, Bristol Myers, Merck, Baxter and Johnson & Johnson. In a report issued Thursday, Keeney projected that seven of the large cap drug stocks appear poised to record third quarter earnings per share growth of about 21% on an aggregate 13% increase in sales. That's down only slightly from growth of 22% in the second quarter, the report noted. "We believe that drug stocks may fall less than the market during this period of economic turmoil," the report said. While drug stocks did not escape unscathed last week, they did fall less than the overall market. On Thursday, the drug index fell 3.4%, compared with a drop of 4.2% in the broad averages, Keeney noted in his report. Late last week, the drug stocks essentially gave up some of the gains they had made earlier in the week as opposed to having followed the market's recent continued fall, Keeney noted. But the gap widened Monday as drug stocks fell further from their lows last week. Keeney described Monday's drop as "irrational selling pressure" on the group and said the downturn "actually might be a sign that a bottom is near at hand." "We believe that our primary universe of large cap, U.S.-based drug multinationals may be a relatively safe haven, and probably lead the way up once the market bottoms," he said in his report. His advice to investors: take advantage of the buying opportunities.