Editor’s Note: This story was originally published on December 30, 2018
(CNN Money) — Pfizer has been right there with the best pharmaceutical companies all year — until now.
The shares have dropped by more than 5% in the past week on concern that a wave of generic drugs will reduce its earnings growth rates, and the trend has raised questions about whether the company might be acquired.
“We think investors have overreacted to expected quarterly earnings weakness which is likely to prove temporary,” said Chief Financial Officer Frank D’Amelio in a statement on Friday.
“While we acknowledge there are headwinds associated with US generic competition, we expect the net impact on earnings will not cause material changes to our 2019 revenue outlook or earnings per share,” he said.
Pfizer was assigned an outperform rating by BMO Capital Markets, a major investment bank, in a research note to investors on Friday. BMO said it had a $53 price target for the shares.
BMO also said it views “long-term fundamentals as solid, given improving sales trends driven by sales increases across many key categories”.
Pfizer’s forecast, issued in October, was for revenue growth of 2% to 3% in 2018, with adjusted earnings per share of $2.11 to $2.20.
The drug company’s shares have seen double-digit sales growth in three of the past four years. Most recently, in its latest quarter, net income rose 9% to $2.69 billion on $14.5 billion in revenue.
By Carolyn Sung