MRK was selling at a PE over ten - not just seven as in Pfizer's case.
MRK also had just miserable results on Gardasil which had been so highly publicized just a few years ago. It suffered a pretty amazing 18% decline from a year ago.
I can't imagine a big Pfizer drug doing that with there being a patent expiration involved.
MRK also had to lower full-year estimates whereas PFE's numbers are always conservative enough where they don't have to do that. They already have that seven-cent beat from last quarter under their belt.
======================================== Re: Market Recognizes GAAP Earnings 26-Feb-10 11:33 am
To show you how just utterly ridiculous GAAP is, Pfizer is expected to earn only $1.03 midpoint on a GAAP basis for 2010 compared with $1.46 in 2009. Do you really think that Pfizer is really doing almost 30% WORSE this year than last given that they have WYE for a full year in 2010 versus only 2.5 months in 2009?
On the other hand, the midpoint estimate for 2012 is all the way up to $1.65. Assuming that the $1.03 for the company is already in the stock, certainly going from $1.03 to $1.65 in just two years is heady growth indeed - close to 30% a year.
If this doesn't show you how worthless GAAP is, nothing will. And investor just looking at GAAP numbers can't tell a thing about how the company's operations are really faring.
By the way, with the SOLE exception of 2009, Pfizer has never failed to get to at least EIGHTEEN times GAAP earnings. And 18 times management's $1.65 GAAP midpoint for 2012 makes this a $30 stock in 2012. Remember - 2009 was the ONLY exception regarding the stock failing to get to 18 times GAAP earnings.
You will never again see this stock below $17. NEVER!