Investment bank Bear Stearns cut its estimates on drug maker Schering-Plough (SGP) after the company said that its earnings per share for the first quarter would be as much as 15% lower than previously expected due to manufacturing problems.
Analyst Joseph Riccardo cut his first quarter 2001 EPS to $1.65 from $1.90 and lowered his 2002 EPS to $1.90, down from $2.17. He notes, however, that there is very little information to base estimates on at this time. Riccardo mentioned Claritin may be negatively impacted by deficiencies at its New Jersey and Puerto Rico facilities. He said the company should be able to post EPS of $2.00 in the 2002 to 2003 time frame.
He noted investors have historically done well by buying drug stocks on negative news and takeover speculation should strengthen the company's share price. His price target on the stock is $55 to $60.