Investors hoped a leadership shake-up at Pfizer Inc might bring divestitures, share buybacks or other moves to kick-start the company's sluggish stock price, but they were wary of disruption stemming from the abrupt change.

The world's largest drugmaker's shares rose 1.4 percent in early trading on Monday as the broader market edged lower, after the company announced late on Sunday that Jeffrey Kindler had retired as CEO and was replaced by Pfizer veteran Ian Read, the company's global head of pharmaceuticals.

Kindler said in a statement issued by Pfizer that the job had been extremely demanding and that he wanted to recharge my batteries.

But Kindler, 55, may also have been under pressure because of the stock's sluggish performance.

Since July 2006, when Kindler assumed the CEO post, Pfizer's shares have fallen roughly 27 percent compared with a 10 percent decline for the NYSE Arca Pharmaceutical index of large U.S. and European drugmakers.

When a company's shares underperform, shareholders express their frustrations to the board, and the board expresses its frustrations by making management changes, said Les Funtleyder, portfolio manager of the Miller Tabak Healthcare Transformation Fund, which does not hold Pfizer.

Goldman Sachs analyst Jami Rubin applauded the change, saying she has long argued that Pfizer should be more aggressive in achieving greater efficiencies in both its $28.5 billion operating expenses base as well as its massive balance sheet and portfolio of various businesses, some of which should be divested.

We are delighted to see the board taking action as Pfizer's share price continues to underperform amid a flurry of questions about strategic direction, Rubin said in research note.

Rubin also said Pfizer should remove its 2012 forecast, which she said was set unrealistically high and has been a source of anxiety.

Pfizer's 2012 forecast includes the first full year of impact from losing exclusive U.S. rights to Lipitor, its mammoth-selling cholesterol drug, and has implied somewhat stable results despite the Lipitor loss.

Kindler's departure comes more than a year after the drugmaker completed the signature move of his tenure -- the $67 billion acquisition of rival Wyeth.

The acquisition of Wyeth, which brought Pfizer more access to biotech drugs and vaccines as well as cost-cutting opportunities, was intended to help Pfizer maneuver through the decline of Lipitor, due to lose U.S. patent protection in November 2011.

But the move has so far failed to jump-start the stock. Pfizer shares have fallen 5.2 percent since the company bought Wyeth on October 15, 2009. By contrast, shares of Merck & Co have jumped 15 percent since it clinched its own mega-merger, of Schering-Plough Corp, on November 3, 2009.

JP Morgan analyst Chris Schott said the CEO change could lead to more aggressive actions by Pfizer, including share repurchases or dividend increases, as well as more business development or divestitures.

While a CEO transition in the midst of a major merger integration will likely create added uncertainty with the story, the key question, in our view, remains on the changes this transition will bring to the Pfizer story, Schott said in a research note.

Barbara Ryan, the long-time pharmaceutical analyst at Deutsche Bank, said Kindler drove Pfizer to become a leaner organization, and that the Wyeth acquisition helped diversify the company's revenue base and decrease its dependence on Lipitor.

Despite these accomplishments, Jeff was not able to develop a sufficient level of support from the investment community, Ryan said in a research note. She said his departure likely resulted from a mutual assessment on the part of the board and Kindler.

Pfizer's appointment of Read, who joined the company in 1978, was a logical one, Ryan said, noting that he is well-regarded within the organization.

Rubin of Goldman Sachs called Read a seasoned executive with over 20 years of experience running many different regions and businesses in pharma.

Some investors may be concerned that the new CEO may not shake-up the company to the degree that some would like to see, but he has the ability to focus the strategy and get the ship going in the right direction, Rubin said.

Pfizer's shares rose 1.43 percent, or 24 cents, to $16.97 in morning New York Stock Exchange trading.

(Reporting by Lewis Krauskopf and Ransdell Pierson; Editing by Maureen Bavdek)

Merck & Co. Pfizer Switch