J.P. Morgan added Wyeth (WYE ) to its Focus List.
Analyst Carl Seiden says he sees growth accelerating from +10% in 2003 to +14% in both 2004 and 2005, vs. the industry average of +8% in 2003, and +14% in 2004 and 2005. Still, he notes that the stock is trading at a 20% discount to its peer group, at the bottom end of the group, and at a 10% discount to its 25-year historical average.
He says the Premarin family of drugs remains a negative; sales of the female hormone replacement product plunged after clinical trials showed an increased risk of ovarian cancer. Still, Seiden says Premarin is a risk that can be defined based on prescription trends. Wyeth also expects the FDA to approve a low-dose version of Premarin in the coming months.
Seiden notes the first quarter results were three cents above consensus, and four cents above his estimates. He says growth should be driven by a diversified, relatively new portfolio of in-line products.