Merrill Downgrades Wyeth to 'Neutral'
Merrill Lynch downgraded Wyeth (WYE ) to neutral from buy.
Analyst David Risinger says the downgrade is based on litigation uncertainty surrounding Wyeth's diet-drug (Fen-Phen), which Wyeth pulled from the market in 1997 after doctors noticed heart-valve damages in some patients. He notes the stock price is likely to be driven in the near term by unpredictable headline news.
Risinger says if Wyeth loses a number of opt-out cases in the near term, there could be downward pressure on the shares; if it wins some court cases, there could be upward pressure. But Risinger notes, given the company's track record of losing five out of six court cases to date, he doesn't feel comfortable having a buy rating on stock going into these trials.