Peabody PFE Analyst Update: 10/30/98 Part 1 of 2
The Peabody PFE Analyst Update is probably the most comprehensive compilation of analyst opinions on PFE ....or any one company.
Click here for a summary of their current analyst PFE ratings. quicken.excite.com
Some general observations about analysts:
1. The vast majority of analysts are overly optimistic. When was the last time you saw a broker issue a "Sell" rating?
2. Analysts who have investment banking links to a company are almost always biased to the upside.
3. A "Hold" rating from an analyst with investment banking tie is a very negative sign.
4. A "Hold", "Neutral" or "Market Perform" rating usually means "I believe there are much better stocks" available. The implied meaning of a hold rating is "don't buy this stock" or "sell if you are a shareholder".
5. Similar to investors, analysts will generally support their previous positions regardless of the facts or market conditions.
6. Analysts will raise or lower their target prices without changing their ratings for a company.
Recommended reading for more information on interpreting analysts' reports:
"Guerrilla Investing" by Peter Siris. shop.barnesandnoble.com
Current analyst opinions and ratings, target PFE prices and "quotable quotes" from PFE analysts are highlighted below. Mr. Peabody has also provided special notes on selected analysts.
Have PFun!
BigKNY3
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Highest Ratings (Usually Strong Buy/Outperform)
Broker: Gruntal & Co.
Analyst: David Saks
Peabody Notes: Usually the most bullish PFE analyst. A favorite on CNBC.
Comments:
10/14/98: PFE@ 87.50 Rating: Strong Buy "Fabulous fundamentals; story still intact despite EPS missing target." Target price: $125.
8/26/98 PFE@107: Rating: Strong Buy: "PFE is my favorite Big Pharma company. It is much more than a one product company...PFE has done it, is doing it, and will do it in the future." Target price: $148.
7/24/98: PFE@111.63: Rating: Strong Buy:" PFE made it clear that they are a powerhouse marketer and going to get stronger". Target price:$148.
7/17/98: PFE@117: Rating: Strong Buy: "We believe the long-term outlook for PFE is among the best in the drug group. PFE remains one of our favorite investments for long-term above-average capital appreciation and total returns." Target price: $148
7/10/98: PFE@115.63: Rating: Strong Buy: "Viagra sales will approach $1 billion this year and possibly $8 billion at peak (2005).... PFE just blew us out of the water. And we haven't seen the impact yet of the international market where Viagra won't be sold for several months….The long-term outlook for PFE is among the best in the drug group…. We rank PFE among the "best of the best" global pharmaceutical firms." Target price: $136
5/18/98: PFE @110.50: Rating: Strong Buy. Rating upgrade. Target price: $136.
4/24/98: PFE @ 115.50: Rating: Buy: Target price: $134.
2/24/98: PFE@88 :Rating: Buy
Broker: SG Cowen
Analyst: Steve Scala
Comments:
7/20/98: PFE@117: Rating: Strong Buy: " The 1998 EPS estimate was raised to $2.12 based on higher sales estimates, driven by Viagra. Target price: $138
3/16/98: PFE@ 88: Rating: Strong Buy: "Valuation is justified because PFE is in top tier of an industry that delivers stable, consistent growth at a rate superior to the S&P, and this rate appears sustainable even given a possible economic slowdown an/or Asian currency woes." Target price: $105.
Broker: EVEREN Securities
Analyst: Jeffrey Kraws
Comments:
10/14/98: PFE @87.50: Rating: Outperform: "We are very disappointed PFE did not show flexibility in attempting to meet estimates. We remain confident in the fundamentals of PFE's business, noting the company needs to reign in its expenses." Target prices: $110 (Intermediate) $125 (Long-term)
9/02/98: PFE @101.06: Rating: Outperform: "People are taking another look at PFE because its earnings growth is one of the highest in the sector and it has the deepest pipeline of future drugs….It is the highest-quality pharmaceutical company out there from a management standpoint and from a product pipeline standpoint." Target prices: $127 (Intermediate) $135 (Long-term)
7/27/98: PFE@ 113.50: Rating: Outperform: "Given the strength of PFE's current product line, as well as prospects for a very solid pipeline going forward, we believe PFE could achieve EPS $$2.27 this year, which is ahead of street consensus of $2.12." Target prices: $127 (Intermediate) $135 (Long-term)
Broker: Aros Securities
Analyst: Tim O'Reilly
Comments:
9/01/98: PFE@ 93: Rating: Strong Buy: Rating upgrade. Target price: $120.
7/30/98: PFE@ 110: Rating: Buy: Target price: $130.
High Ratings (Usually Buy/Attractive)
Broker: Salomon Smith Barney
Analyst: Christina Heuer
Peabody Notes: The very best Big Pharma analyst. Bullish on PFE for over 3 years.
Comments:
10/14/98: PFE@87.50: Rating: Buy: "We were disappointed by PFE's shortfall in 3Q EPS, but sales and pretax income increased 21%---hardly a shabby performance. Moreover, PFE's pharma sales growth---excluding Viagra and currency penalties-remains very strong. PFE's big investment in marketing is penalizing EPS growth in 1998 but should propel pharma sales growth in 1999 and thereafter." Target price: $115.
10/07/98: PFE@ 90.12: Rating: Buy: "This is a buying opportunity…PFE is a victim of selling rotation that has hit drug group." Target price: $135.
9/21/98: PFE@ 97: Rating Buy: "WLA, PFE, SGP, LLY have the highest projected EPS growth." Target price: $135.
8/26/98:PFE@ 105: Rating: Buy: " PFE's stunning launch of Viagra and its 1Q98 announcement to co-promote Celebrex jacked up its earnings outlook to a higher level."
7/27/98: PFE@114 Rating: Buy: "Viagra was just submitted in Japan; PFE expects an expedited review and reimbursement and indicated approval during 1H99 seemed reasonable...We expect Celebrex to be one of the major new drug launches of 1999." Target price: $155
7/24/98: PFE@ 113.50: Rating: Buy: "PFE has been volatile in 2Q98 as Viagra Rxs decreased and Zeldox failed to win FDA approval. We view this as a buying opportunity."
7/03/98: PFE @107.50: Rating: Buy: "Zeldox is not dead yet. But the drug is in limbo until PFE discloses the results of its pow-wow with FDA. Best case: delayed 6-18 months while PFE generates additional data or re-analyzes current data. Worst case: Zeldox is never approved by FDA."
5/01/98: PFE @ 112.63: Rating Buy: "Viagra is not just a drug, it's a phenomenon." Price target:$155.
2/26/98: PFE @ 87: Rating Buy: "Reflecting its participation in three of the industry's biggest new drugs (Lipitor, Viagra, Celebrex) and low exposure to major patent expirations, PFE should continue to command the highest P/E ratio in the drug group.
11/11/97: PFE@ 69: Rating: Buy: "After a sluggish 1997, PFE's EPS growth is poised to rebound to 20% level. Viagra could make PFE one of the best performing drug equities in 4Q97 and 1Q98."
Broker: Bear Stearns
Analyst: Ricciardi/Shevick
Peabody Notes: Bear Stearns president is a large PFE shareholder.
Comments:
10/07/98: PFE@90.63: Rating: Attractive: "Viagra sales could be $125-150 million in 3Q…We believe PFE faces a brighter outlook in 4Q and in 1999."
8/19/98: PFE@108.94:Rating: Attractive: "At this juncture, we see no reason to change our general view on Viagra. While US new Rxs have fallen below what we thought they would bottom at 110,000 to 125,000, European approvals in the early fall are 1Q earlier than expected and an approval in Japan, the third largest market in the world, including full reimbursement, is two years earlier than expected." Target price:$125.
8/14/98: PFE@101.19: Rating: Attractive "PFE's share price is still dominated by Viagra RX trends which continue to moderately decline. Upcoming positive news could include an expedited review for Celebrex and a possible FDA advisory committee meeting by year-end. Target price: $125
7/21/98 PFE@117.94: Rating: Attractive: "Viagra is expected to receive EU marketing authorization in 9/98." Target price: $125.
7/10/98 PFE@ 115.63: "Viagra Rxs appear to be stabilizing and two year acceleration of Viagra's approval/launch in Japan, we consider to be a significant positive." Target price:$125.
Broker: NationsBanc Montgomery Securities
Analyst: Leonard Yaffe MD
Peabody Notes: Probably the only physician analyst for Big Pharma.
Comments:
10/22/98: PFE @98: Rating Buy: " (Viagra) is still the most successful drug ever. It's just not twice as much as the next closest…We expected this rapid uptake, the lull in between, and the flattening out."
9/04/98: PFE@ 99: Rating: Buy: PFE remains NationsBanc's favorite drug stock….There is tremendous interest in Europe awaiting the introduction of Viagra."
8/10/98:PFE@103.50: Rating: Buy: "We continue to believe that Cox-2's will eclipse the potential of other recent blockbusters including Celebrex. If Celebrex was filed on schedule, we note that priority review would represent upside potential of about $0.05 to our PFE model." Target price:$132
7/14/98 PFE@118.69: Rating: Buy: "With its aggressive near-term investment, impressive line of differentiated products, minimal patent exposure and strong pipeline, PFE has among the best fundamentals in the pharmaceutical industry and tremendous earnings potential."
7/10/98 PFE@ 115.63: Rating: Buy: "The drug of the year is Viagra, but PFE has in hand
what should be next year's drug of the year (Celebrex). (Earnings) were driven by Viagra, which beat our estimates by a couple of million $."
Broker: J.P. Morgan Securities
Analyst: Carl J. Seiden
Comments:
10/26/98: PFE@ 103.63: Rating: Buy: "Viagra Rxs appear to be bottoming out…The absolute number of Viagra Rxs is still strong and support our 1998 US estimate of $700 million."
10/14/98:PFE@ 87.50: Rating: Buy: "The disappointment in the 3Q stems more from PFE preparing for the introduction of new potential blockbuster than from lower-than-expected Viagra sales….PFE's long-term prospects outweigh the 3Q disappointments……PFE management has a clear track record of managing the company, rather than managing near term results. While investors may argue they need to do both, or at least communicate better- this approach has served PFE well to date…..We view PFE as the best way to play the product story of 1999."
10/07/98:PFE@ 88.75: Rating: Buy: "With 20% EPS growth likely over the next five years…we view this as a great buying opportunity."
8/26/98: PFE @107:Rating: Buy: "PFE is the best company in the industry based on their current product line and pipeline…Despite their high valuations, PFE and WLA are sure to deliver because of their strengths…. Viagra will settle down to real sufferers. For that group, the risk benefit profile is fine…Given that 2.6 million patients are taking the drug, the number of deaths reported is not unusual at
all." Target price: $131
8/10/98: PFE@103.50: Rating: Buy "Viagra new Rxs have still not reached their trough. However, refills remain strong and were up 2%...The absolute number of Viagra Rxs are still very strong. Assuming new Rxs will stabilize at present levels and grow modestly from there and assuming refills grow to 150% (83% at present) of new Rxs, then US Viagra sales would aggregate $0.7B in 1998- still somewhat above our Viagra estimates."
7/10/98: PFE@ 115.63:Rating: Buy: "PFE is best in industry".
10/8/97: PFE@64.88: Rating: Buy: "PFE is best in its class and should be a core holding in any growth portfolio." Target price: $73.
Broker: Merrill Lynch
Analyst: Steven Tighe
Peabody Notes: ML is still the most powerful broker.
Comments:
10/14/98: PFE@ 87.50: Rating: Buy: "We expect the 4Q to be extremely strong and are currently looking for earnings growth next year in excess of 20%. We would take advantage of any near term weakness caused the 3Q earnings announcement. Target price: $110.
9/28/98: PFE@ 107: Rating: Buy: "We believe that the fundamentals of PFE continue to be strong. We would take advantage of any weakness in stock price as a good buying opportunity."
9/18/98: PFE@ 97.25: Rating: Buy: " PFE earnings will be primarily a function of discretionary spending as the company brings on an additional sales force for the launch of Celebrex in early 1999."
7/28/98: PFE@111.63: Rating: Buy: "We continue to believe that PFE has the best fundamentals in the industry." Target price: $135-$138.
7/10/98: PFE@ 115.63: Rating: Buy: Near-term and long-term: "Viagra sales were better than expected.... It is likely Celebrex will receive expedited review with a launch as early as 1/99.The company's expectation is Viagra will be introduced in 50 countries by the end of the year."
4/24/98: PFE@ 115.50: Rating: Buy: Raised 1998 estimate to $2.15 EPS.
Broker: PaineWebber Inc.
Analyst: Jeffrey Chaffkin
Comments:
10/14/98: PFE@ 87.50: Rating: Buy: "PFE's position as a market innovator with strong existing products, dramatic success with its most recent product launches, multiple high potential new products and minimal patient exposure, should support its earnings to grow at the top tier of the industry for the foreseeable future."
10/08/98: PFE@ 86: Rating: Buy: Upgrade from Attractive "to reflect PFE's strong long-term outlook."
7/10/98: PFE@ 115: Rating: Attractive: Target Price: $130
4/20/98: PFE@ 105.125: Rating: Attractive: Upgrade to Attractive from Neutral. "Viagra 1998 sales will reach $600 million. Because it is the first pill for impotence there is no history of similar drugs to help predict how many people will seek such a therapy."
Broker: Schroder & Co.
Analyst: Jami Rubin
Peabody Notes: Analyst most likely to issue a future PFE downgrade.
Comments:
10/14/98: PFE @87.50: Rating: Outperform: "Our best guess is that the downside will be limited to the mid $80s at which point we would be buyers of this stock." Target price: $105.
8/14/98: PFE @101.19: Rating: Outperform "When offering a level of efficacy comparable to leading NSAIDs, clinical data has so far demonstrated the COX-2s promise a much-improved safety profile." Target: $130
2/23/98: PFE@88: Rating: Outperform: Rating downgrade.
1/23/98: PFE@78.00: Rating: Outperform Significantly: "Given PFE's superior growth characteristics, as well as a risk and return profile more favorable than the group, PFE is on our recommended list." Target price: $100.
Broker: ABN-Amro
Analyst: James Keenly
Comments:
9/04/98: PFE@ 94.25: Rating: Buy: "Stratospheric Viagra sales numbers indeed were clearly heading back to earth. But many other companies would like to have claim to that piece of earth…. Viagra remained an undisputed blockbuster only four months after launch."
8/14/98: PFE@101.19: Rating: Buy: "We expect PFE to rebound from current levels, which have been reached due to the overall market downturn and continued decline in weekly Viagra Rxs. However, Viagra refills have recently climbed to a strong 75-85,000 weekly pace.... In our opinion, pending co-promotion of Celebrex will soon become an additional key drive for PFE's stock price.
2/25/98: PFE@88: Rating: Buy: Started coverage.
Broker: Argus Research
Analyst: Barry Rosen
Comments:
10/14/98: PFE@ 87.50: Rating: Buy: "PFE had a lot of momentum. It was a clear leader. Now people are going to question whether the armour has cracked in this sector."
9/24/98: PFE@ 105: Rating: Buy: "Shares have declined better than 20% from their peak, and growth prospects remain outstanding." Despite concerns by many pundits of slowing new Rx data (which we had anticipated), Viagra is on course to generate $750 million and $1 billion in sales this year." Target price: $120.
9/01/98 PFE@ 93: Rating: Buy: Upgrade from Hold.
Broker: Gerard Klauer Mattison
Analyst: Cynthia Beach
Comments:
10/14/98: PFE@ 87.50: Rating: Buy: Reiterated rating: Target price: $120.
8/14/98 PFE@101.19: Rating: Buy: "We rate LLY, MRK, PFE as BUY and AHP, BMY, SGP, and WLA as HOLD... Given the large and growing size of the arthritis market, we project (Celebrex and Vioxx) could achieve sales greater than $1 billion."
7/10/98 PFE@115.63:Rating: Buy: "PFE's robust pipeline of new products is expected to provide earnings growth well into the next decade, but much of PFE's current price is based on anticipated significant sales of Viagra." Target price: $140.
Broker: Warburg Dillon Read Inc
Analyst: Jerome Brimeyer /Timothy Chiang
10/14/98: PFE@ 87.50: Rating: Buy: "PFE probably spent $100 million to hire these extra 1,100 salespeople in advance of the Celebrex launch, but by doing so they're preparing themselves for a very strong 1999. The company is basically on track…. Strong 26% growth in its core drug business, $2 billion sales potential for Celebrex, and company's expenses flexibility." Target price: $120.
7/10/98: PFE@ 115: Rating: Buy: Target price: $135
Broker: A.G. Edwards
Analyst: Kenneth R. Nover
Comments:
10/15/98: PFE@ 96.38: Rating Buy: "PFE continues to prove itself a top tier grower in the group…We continue to believe that PFE has the richest product line and pipeline of any major pharmaceutical company which will propel consistent industry-leading growth….Despite an incredible six-fold share increase in three and half years and a valuation at the high end of the historical range, the shares are expected to appreciate in line with earnings growth."
7/27/98: PFE@113.50: Rating: Buy: "Earnings were spurred by impressive sales growth of in-line products and successful launches of Viagra and Trovan."
7/13/98: PFE@118: Rating: Buy: "We currently recommend investors to overweight drug stocks...As the strongest large-market capitalization drug stock, we recommend PFE."
Broker: Dresdner Kleinwort Benson
Analyst: Premal Pajwani
Comments:
10/14/98: PFE@ 87.50: Rating: Buy: "Investor focus will shift from Viagra in the fourth quarter to Celebrex….PFE's product offering is still among the best in the sector…The fundamental story is still very much intact…We urge investors to buy PFE on weakness." Target price: $125
Broker: Deutsche Bank
Analyst: Mariola Haggar
Comments:
10/18/98: PFE@98.14: Rating: Buy: Upgrade from Accumulate: "An excellent buying opportunity. Our belief is that on November 6th, it may be time for PFE to unveil the next batch of drugs that will emerge from PFE's research and fill the future pipeline." Target price: $130.
10/14/98: PFE@87.50: Rating: Accumulate: "We do not view the shortfall in the quarter due to higher spending as a negative, but rather as the company preparing a strong base for explosive growth in 1999." |
