Health & Fitness
Health and Fitness
Health and Fitness
Wed, February 11, 2009 Zacks Industry Outlook Highlights: Pfizer, Eli Lilly, Merck, Sanofi and Schering-Plough
CHICAGO--([ BUSINESS WIRE ])--Zacks.com releases the latest Industry Outlook. Today's interview is with senior analyst Jason Napodano,who talks about the Pharmaceuticals Industry, including Pfizer (NYSE: [ PFE ]), Eli Lilly (NYSE: [ LLY ]), Merck (NYSE: [ MRK ]), Sanofi (NYSE: [ SNY ]), and Schering-Plough (NYSE: [ SGP ]).
A synopsis of today's Industry Outlook is presented below. The full article can be read at [ http://at.zacks.com/?id=2678 ].
Large pharmaceutical companies all seem to be in a similar boat heading into 2009. Most of the names in the industry are facing significant patent challenges in the years to come. U.S.-based firms are facing foreign exchange headwinds as well. Revenue growth is non-existent, and earnings growth is being driven primarily by cost-cutting and share buybacks.
Knowing that investors rarely pay-up for this type of manufactured earnings growth, we struggle to see a broad-based out-performance for the large-cap pharmaceutical sector in 2009.
Valuations, however, are attractive, with several of the largest players trading at PEs below 10x, including Pfizer (NYSE: [ PFE ], 7x), Eli Lilly (NYSE: [ LLY ], 9x), Merck (NYSE: [ MRK ], 9x), Sanofi (NYSE: [ SNY ], 9x), and Schering-Plough (NYSE: [ SGP ], 10x) based on our fiscal 2009 estimates. Attractive valuations, along with big dividend yields, should protect investors against significant downside risk even if the economy continues to languish well into the second half of the year.
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