Wachovia Cuts King Pharmaceuticals to Market Perform

Analyst Michael Tong says sales of the drugmaker's three key products are significantly below expectations

Wachovia downgraded King Pharmaceuticals (KG ) to market perform from outperform.

Analyst Michael Tong says King's 11 cents operating earnings per share is below his 32 cents estimate and the 33 cents consensus. He notes sales of all key products (Altace, Levoxyl, Skelaxin) are significantly below expectations.

Tong says his previous positive outlook on the stock was predicated on its low p-e, and the prospect that trade inventory levels of key products was nearing normalization. Now, Tong says this doesn't appear to be the case. He cut the $1.50 2004 earnings per share estimate to 96 cents.