Thursday, October 20, 2005

Follow Up: Pfizer's Report Depresses Stock

We hit the nail on the head with our sell rating on Pfizer shares.

On September 30, we advised readers that:
Pfizer, like Citigroup, has kept its shareholders in the house of pain for several years.

How come?

Pfizer spends more than $7 billion annually on R&D, and yet its drug pipeline remains anemic.

The bulls find PFE attractively valued.

No doubt PFE is dirt cheap, but the fact of the matter is that Pfizer is losing the batttle to generic competitors.

Two of its blockbuster drugs lose patent in 2007.

Nine out of ten analysts who cover the stock have a hold or buy on PFE.

Apparently these guys aren't bothered by the fact that CEO Hank McKinnell sold $20 million dollars worth of stock in the open market (on or around August 16) .

But we won't entertain such insouciance.

Sell Rating on PFE until the dust settles.
Today, PFE reported a 52 percent drop in third-quarter profit and withdrew its financial outlook through 2007 due to tumbling sales of its Celebrex arthritis drug and generic competition for other medicines, sending shares to an eight-year low.

Pfizer also said it expects 2005 earnings to fall as much as 9.4 percent, a decline steeper than its earlier forecast.

PFE is having trouble growing organically; we are again advising readers to interpret that as a red flag.

As if signs that Big Pharma was in trouble weren't obvious enough.

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