7 Catalysts For Eli Lilly Over The Next Year
Credit Suisse in a note Monday listed seven catalysts for Eli Lilly and Co (NYSE: LLY) shares over the coming year even as it downgraded the shares of the company on the pretext that there are limited drivers of further upside after the stock's recent run, which lifted it by 13 percent since mid-August.
As such, the firm downgraded shares of Eli Lilly from Outperform to Neutral but maintained its price target for the shares at $88.
At time of writing, Eli Lilly shares were sliding 1.30 percent to $85.91.
Analysts Vamil Divan, Michael Morabito, Barbara Kotei and Duaa Mohamed discussed several factors that prompted them to have below-consensus estimates for the company. Notwithstanding the risk factors, the analysts see a few catalysts over the coming year. The catalysts include:
See also: Attention Biotech Investors, Here's Your PDUFA Primer For October
The risk factors the analysts are wary about including their below-consensus sales forecast for Basaglar and, over time, for Humalog as well. The analysts also assume a slower ramp for Verzenio following its recent FDA approval, given the competition in the space. Verzenio is indicated to treat advanced or metastatic breast cancer.
The analysts also adjusted their expense forecasts due to the loss of patent protection for two higher margin drugs, namely Strattera and Cialis.
Credit Suisse expects sales to be flat in 2018 due to patent expiries, before returning to growth. The firm expects 2015–2020 sales to grow at a CAGR of about 4 percent as opposed to the company's guidance of 5 percent, plus.
Although the firm sees an expansion in operating margin from about 25 percent in 2017 to 30.6 percent in 2010, it left its earnings per share estimates for the 2018–2020 timeframe below 2–3 percent below the Street.
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Image Credit: "Eli Lilly float at the 2017 500 Festival Parade" By NaBUru38 - Own work, CC BY-SA 4.0, via Wikimedia Commons
Latest Ratings for LLY
Oct 2017 | BMO Capital | Maintains | Underperform | |
Oct 2017 | Credit Suisse | Downgrades | Outperform | Neutral |
Sep 2017 | Jefferies | Maintains | Buy |
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