**[investwise]** Citibank Raises Sector Weightings For Pharmaceuticals

 

Citi Investment Research analyst Tobias Levkovich has adjusted his weightings on several industries, including cutting three consumer discretionary groups while upgrading the pharmaceutical and biotechnology group.   THE OPINION: Every two months, Citi reviews all 24 industry groups in the Standard & Poor's 500, a broad stock index, and adjusts its recommended weightings for investor portfolios.   Levkovich on Friday said a pullback on consumer discretionary groups is warranted "with some added defensiveness through a projected choppy trading environment this summer." He downgraded ratings on three consumer discretionary groups: the autos and components group and media group were cut to "Underweight" from "Market Weight," while consumer durables and apparel was trimmed to "Market Weight" from "Overweight."   The only consumer discretionary group that Citi now rates "Overweight" is consumer services. The retailing group remains at "Underweight." Levkovich also downgraded the transportation group to "Underweight" from "Market Weight."   The only group that Levkovich upgraded was pharmaceuticals and biotech, which rose to "Overweight" from "Market Weight." The group "looks poised to outperform after suffering substantial underperformance over the last 12-18 months," Levkovich wrote.   He said good values can be found in the pharma and biotech group now. Current market prices, he said, appear to reflect the challenge that drug makers face from the currently strong U.S. dollar, which has made it more expensive for foreigners to buy U.S.-made drugs.   As a result of the weightings changes, Levkovich has removed Omnicom Group Inc. from his list of recommended stocks, while adding Merck & Co.     THE BROADER MARKET: Levkovich predicts a surge in the market is likely starting in the September-October period. He said a buying mood may take over because uncertainty about 2011 will be reduced amid the run-up to midterm congressional elections and the scheduled release of a bipartisan commission report on reducing the U.S. government's budget deficit. Levkovich also said investors will have a better sense of how tax cuts approved during the Bush administration will expire. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.   Nothing in this article is, or should be construed as, investment advice.

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