Wyeth shares could rise more than 20 pct: Barron's
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Sun, 01 Apr 2007 16:00:00 GMT |
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NEW YORK (Reuters) - Wyeth shares may rise 20 percent or more because its business is improving, its experimental drugs to treat patients with Alzheimer's disease are promising, and it could be an attractive takeover target, Barron's newspaper said in its April 2 edition.The company's shares could rise into the 60s from Friday's close of $50.03, where the ratio of price to expected 2007 profit is 15 percent below typical peers among big drug companies, the newspaper said.Wyeth shares trade at 14.5 times the average analyst forecast for $3.45 profit per share in 2007, according to Reuters Estimates. Fourth-quarter profit totaled $855 million, or 63 cents per share, and excluding items totaled 66 cents per share.Barron's said Madison, New Jersey-based Wyeth should increase profit at 15 percent annually, regardless of whether any of its dozen Alzheimer's drugs under development pay off.But it said if only a few of the drugs succeed, the company could generate hefty revenue should many of the 5 million Alzheimer's patients in the United States spend a few thousand dollars a year on treatments for the disease.The newspaper said Enbrel, a product designed to treat arthritis, and Prevnar, a strep vaccine, should help lift cash flow and profit.Another big product is the antidepressant Effexor, which generated about 18 percent of the fourth quarter's $5.22 billion of revenue.The newspaper said Wyeth may also be near the end of incurring costs for its discontinued fen-phen diet drug, following a nationwide settlement and $21 billion of charges.In addition, the newspaper said Wyeth is one of only a handful of drug companies that might be attractive merger partners for big rivals such as Pfizer Inc. and Switzerland's Novartis AG .Wyeth's stock peaked at $70.25 in April 1999. Its shares' 52-week high is $54.10, set on October 19, 2006.
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