Should You Buy It? Forest Labs a Bargain

Forest Laboratories(FRX Quote) is the second-worst performer in the Amex Pharmaceutical Index (DRG) year to date, down 24% at Wednesday's closing price of $38.40 (up $1.20).

One reason for the poor performance is a problem that affects most drugmakers -- investors are worried about the lack of potential blockbuster drugs in the company's clinical pipeline.

But Forest has now received two analyst upgrades this week, focusing on the stock's discount valuation. At current levels, the shares are trading at just 12.3 times expected fiscal 2008 (ending March) earnings of $3.12 per share. ...