From Standard & Poor's Equity ResearchCITIGROUP SAYS PFIZER-WYETH DEAL MAKES STRATEGIC SENSE
Citigroup analyst John Boris says Pfizer (PFE) needed a large scale acquisition to address its 2011-2013 patent cliff.
Boris sees Pfizer and Wyeth (WYE) as making strategic and financial sense for shareholders, contingent on WYE shareholders getting $50 a share. He says PFE shareholders would also benefit, as its operations would gain much needed scale to navigate its patent cliff.
He figures earnings for the combined company improve to $2.75-$2.85 in 2012 from $2.18 for PFE stand alone. He has a $20-$24 per share target, based on 9-11 times mid-point of that EPS range, discounted back three years.
CITIGROUP UPGRADES LENNAR TO BUY FROM HOLD
Citigroup analyst Josh Levin says the recent sell-off in Lennar (LEN) share following allegations of fraud and improper behavior made by Barry Minkow and the Fraud Discovery Institute (FDI) is overdone. He notes since the allegations were made, LEN is down about 40%, vs. peer group off 19%.
Levin sees LEN rebounding in the near-term on three catalysts: 1) expects LEN to release enhanced disclosure on its joint ventures; 2) sees reasonable chance LEN will force a positive settlement in its libel suit vs. Minkow/FDI; 3) sees company making a more concerted effort to meet with investors.
He has an $11 price target on the stock.