Expecting drama, Goldman upgrades Pfizer

Add Goldman Sachs to the list of market-watchers who predict dramatic action from Pfizer--and soon. The investment bank took Pfizer off its "Americas Sell" list, which amounts to an upgrade to "neutral." That's not exactly an exhortation to  "buy, buy, buy," but it is evidence of Goldman's confidence that the drugmaker will take some kind of bold step. "The imperative for radical change is higher than ever, and we believe that pressure is mounting on management to do something big and soon," Goldman said.

In Goldman's view, Pfizer's stock is undervalued compared with other Big Pharma stocks. Any kind of dramatic change would boost it upward, "regardless of what precisely this action is," the broker concludes.

Meanwhile, the company announced it would lay off 556 salespeople in Italy, mostly reps who call on primary care docs. The cuts amount to almost one-fifth of Pfizer's Italian workforce of 2,780. Sales folks who are devoted to specialty meds and cancer drugs likely won't be affected by the layoffs; trims in those areas will be "very minor adjustments" or completely nonexistent.

The layoff strategy, though, isn't likely to thrill analysts or investors. Everyone who's anyone in Big Pharma is doing it. Plus, the kind of drama they're looking for from Pfizer is a pole-vaulting-ahead kind of move, not further retrenchment. Can anyone say "M&A?"

- see the news [1] at MarketWatch
- check out CNN Money's article [2]

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