Chiron Corp stock dropped $5.50 a share in trading Wednesday,which the company partly attributed to a downgradedrecommendation by a widely followed analyst.

However, Merrill Lynch analyst Stuart Weisbrod, told BioWorldhe issued his lower short-term rating for Chiron, from"accumulate" to "neutral," in the afternoon, after the stock hadalready retreated $3 a share.

Chiron (NASDAQ:CHIR) ef Emeryville, Calif., which also reportedon Wednesday second-quarter results in line with analysts'estimates, finished the day at $51.50 a share on trading volumeof more than 1.5 million shares, or about 5 percent of itsoutstanding stock. It has traded in a 52-week range of $34.75to $79 a share.

While cutting his short-term rating on valuation factors,Weisbrod said he maintained his long-term "aggressive buy"rating for the stock. "They have one of the best (product)pipelines in the industry, along with Immunex," he said.

Weisbrod said he had considered lowering his rating beforeChiron reported a second-quarter loss of $4 million, or 13 centsa share. The Merrill, Lynch analyst reversed his full-yearforecast for Chiron from a 5-cent profit to a 5-cent loss. For1993, Weisbrod adjusted his per-share profit forecast from$1.45 to $1.05, reflecting his recalculation of the company'sR&D spending.

Chiron considers "reasonable" a 30-cent to 60-cent-per-shareprofit for 1993, Larry Kurtz, the company's director ofcorporate communications, said Wednesday. Excluding a $40million charge taken in the first quarter for costs associatedwith Chiron's merger last year with Cetus Corp. and a $3.35million second-quarter charge for seismic repairs to a leasedresaearch facility, the company has produced close to break-even so far this year, Kurtz said.

Other analysts also predicted 1993 profits for Chiron. BrandonFradd of Montgomery Securities forecast profits starting in thefirst quarter of 1993 and reaching 60 cents per share for thatyear. Chiron's recently ended quarter was "the strongestquarter they've ever had," he said.

Jeff Casdin of Oppenheimer & Co. sees a 75-cent-per-shareprofit for 1993 and maintained his recommendation of"aggressive buy."

-- Chuck Lenatti Managing Editor

(c) 1997 American Health Consultants. All rights reserved.

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