Pfizer Shares the Pain

Grofik isn't alone in his caution. According to Thomson First Call, there are now 18 buy ratings vs. 13 neutral recommendations; three months ago, there were 18 buy recommendations and eight neutral ratings.

"We expect that Pfizer's results this quarter will exhibit a mixed bag of performance," said Albert L. Rauch of A.G. Edwards in a Tuesday report to clients as he held on to his hold rating. The result, he said, will be a fourth-quarter EPS of 59 cents and a full-year EPS of $2.13, which is in line with the Wall Street consensus.

Rauch is looking for a 2005 EPS of $2.29 -- Grofik predicts $2.05 -- while the consensus of analysts surveyed by Thomson First Call expects $2.15.

On the basis of prescription trends, Rauch said the strong performers for the fourth quarter of 2004 will be the cholesterol drug Lipitor, the blood pressure drug Norvasc, Celebrex and Bextra, among others.

The weak performers will be Neurontin and the antifungal drug Diflucan, both being hit by generic competition, and Viagra, whose sales are being hurt by brand-name competitors. (Rauch doesn't own shares; his firm doesn't have an investment banking relationship.)

Rauch predicts that Celebrex and Bextra "will likely demonstrate growth on a sequential and year-over-year basis," thanks to Merck's(MRK Quote) withdrawal of Vioxx from the market on Sept. 30. But he warned about the "increased noise level as it relates to the cardiovascular side effects with Cox-2 inhibitors as a class."

Vioxx, Bextra and Celebrex belong to that class of drugs. An advisory panel of the Food and Drug Administration will hold three days of hearings in mid-February on all Cox-2 drugs, including Dynastat, a Pfizer drug that is sold in foreign markets. Pfizer recently submitted an application to the FDA for Dynastat's approval.