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

To: BigKNY3 who wrote (7384)	4/14/1999 2:51:00 PM
From: BigKNY3	Read Replies (2) \| Respond to of 9523

US pharmaceutical stocks forfeit some gains NEW YORK, April 14 (Reuters) - Shares of the largest U.S. pharmaceutical makers slumped on Wednesday amid profit-taking ahead of first-quarter earnings reports and heightened investor interest in financial issues, analysts said. The American Stock Exchange Drug Index, which includes big U.S. drug makers and a handful of large European companies, was off about 2.5 percent at 1:30 p.m. EDT (1730 GMT) at 411.47. The index reached a record high of 424.94 on Monday. Merck & Co. <MRK.N>, the largest U.S. drug company and a component of the Dow Jones industrial average, was off $3.81 at $79.50. Pfizer Inc. <PFE.N>, maker of the blockbuster impotence drug Viagra, was off $3.06 to $146.37. American Home Products Corp. <AHP.N> fell $3.31 to $65.12, while diversified health giant Johnson & Johnson <JNJ.N> slipped $1.69 to $96.94. Warner-Lambert Co. <WLA.N>, maker of the anti-cholesterol drug Lipitor, was off $2 to $70.50. Schering-Plough Corp. <SGP.N>, maker of the antihistamine Claritin, was off $2.44 to $57.37 Timothy Chiang, a Warburg Dillon Read pharmaceuticals analyst, said the downturn was a breather for big U.S. drug makers, which on average have seen their stock prices climb 10 percent so far this year. He said American Home Products has led the pack, with its shares up 21 percent so far in 1999, followed by Pfizer (up 19 percent), J&J (18 percent), and Merck (13 percent). "Investors should not be overly concerned about today's downturn because fundamentals remain strong for the drug group," said Chiang. He predicted Pfizer would report year-over-year earnings growth of about 27 percent for the first quarter. The company is expected to announce results either this week or next. Chiang said Wall Street expects Warner-Lambert to post first-quarter earnings growth of 33 percent when it reports results later this month. He sees Schering-Plough earnings rising 20 percent. J.P. Morgan drug analyst Carl Seiden speculated that investors were slighting pharmaceutical stocks in favor of financial stocks and other cyclical issues that could benefit from an increasingly likely improvement in the global economy. "On a relative basis, if the global economy gets better, many investors will be jumping into financials (banks and brokerages) and other cyclical plays, diverting attention from pharmaceuticals," Seiden said. In any case, he said, large U.S. drug companies remain a solid investment, with expected average earnings growth of 16 percent in the year 2000 and no sign of a slowdown in current strong demand for profitable new prescription drugs. Sharon Doering, a drug analyst for Madison Securities in Chicago, said interest in pharmaceuticals has been eclipsed in recent weeks by fascination with Internet and high-technology stocks. She predicted greater attention would shift to pharmaceuticals and away from high-tech issues by the second half of this year as concerns magnify about "Y2K" problems -- that some computers may not work as their clocks turn to the year 2000.