Is it time to buy Schering Plough stock?

Shares of Schering Plough (NYSE:SGP) and Merck & Company (NYSE:MRK) have dropped 40% and 25% respectively since January 2008 when first news of negative results were made public. The downward spiral accelerated in the past week since ENHANCE was presented at the meeting of the American College of Cardiology. Full publication and comments have published in the New England Journal of Medicine.

Schering Plough CEO Fred Hassan did not wait more than a few days to announce a major restructuring, including 5 500 lay-offs of 10% of worldwide staff, for total annual savings of $ 1.5 billion. mostly in the US.  That gave an immediate boost to Schering Plough stock which jumped 11% on Thursday to $15.32 having hit a record low of $ 13.83 the previous day.

Yet, Wall Street worries that that may not be enough and that Vytorin and Zetia will never recover the $ 5.2 billion in sales reached in 2007. However some analysts are bullish at the prompt reaction of Fred Hassan to cut costs, accelerate Organon’s integration and improve productivity. Credit Suisse C.Arnold reaffirmed an “outperform” rating and a target price of $ 32. Others like Mad Money’s Jim Cramer also sticking with Schering Plough stressing that SGP trades at less than 10 times earnings, that the company is valued at the price of Organon plus Remicade sales, while it has another $ 15 billion in sales and the second best short term pipeline in the industry based on potential launches in the 2008-2012 period.