Talking Numbers

Pfizer can use some Viagra: Analysts

This chart spells trouble for Pfizer

Now watching

Next video starts in : 7 Play

This chart spells trouble for Pfizer

This chart spells trouble for Pfizer
Replay video
Up next

Why the market has more room to go

Why the market has more room to go Up next

Why the market has more room to go

The Dow Jones industrial average is on the cusp of breaking through the pivotal 17,000 level, but not all of its components are participating in the rally. And perhaps the worst outlier is Pfizer, down nearly 9 percent in the last three months and severely lagging the broader market over the past year.

Will the pharmaceutical company, which makes  Viagra, be able to turn it around?

(Read: Dow industrials end lower for first session in seven)

“There’s just nothing to be excited about when you are looking at Pfizer from my standpoint,” said Marc Lichtenfeld, The Oxford Club’s chief income strategist. “There are just better stocks out there.”
And according to Lichtenfeld, there are two main reasons not to buy the stock right now, earnings growth and lack of innovation.

“Over the next five years, the annual earnings growth is projected to be a minuscule 3 percent, actually less than 3, versus 11 percent for the sector,” he said. He also said Pfizer lacks the innovation that a pharmaceutical or biotech company needs in order to appeal to investors.

View gallery


The long-term chart for Pfizer.

As far as the technicals, Sterne Agee’s chief market technician Carter Worth said the charts have gone from bad to worse.

“The long-term chart is very telling,” he said while looking at a price chart that dated back to 1980. “Most stocks peaked in ’99 or 2000 and sold off to the ’02 low and then made new highs in ’07. Pfizer never did that, Pfizer kept going down.”

(Read: Shire flags new drugs in AstraZeneca-style defence to AbbVie)

View gallery


Pfizer shares are down nearly 9% in the past 3 months and severely lagging the broader market. Why it could get …

In addition to the long term chart, Worth said a broken trend line and poor relative strength to the broader market tells him there is no reason to own the stock at current levels.

Check out the video above for the full discussion on Monday’s CNBC’s “Street Signs.”


View Comments (13)