OPTIMISTIC ANALYSIS OF WARNER-LAMBERT

Despite the not so positive general consensus opinion on Warner-Lambert, analyst Jonathan Gelles at Wertheim Schroder is recommending purchase of the company's stock, and suggests that its prospects are considerably better than current opinion suggests, with earnings forecasts likely to be raised in the coming months.

Earnings per share in 1992 are estimated by Dr Gelles to reach $4.75, and $5.40 in 1993. Total sales in 1992 are forecast at $5.4 billion, up 7.5% on 1991, and net income is estimated at $640.4 million, an increase of 354.8%. Pretax profit is forecast to grow 302.7% to 891.9 in 1992.

Bad feeling about Warner-Lambert has been provoked by the recent spate of disappointments the company has suffered. These include: its Alzheimer's disease treatment Cognex (tacrine) not getting US Food and Drug Administration approval; questions have been raised relating to the US launch of the company's Lopid SR (gemfibrozil) in an attempt to offset imminent generic competition to its top-selling product Lopid; prospects being unrealistically high for its new biodegradable material Novon; and controversy over the alcohol content of the mouthwash, Listerine.