BMO Capital Downgrades Eli Lilly (LLY) to Market Perform Following Sola's Failure

November 23, 2016 1:48 PM EST
Get Alerts LLY Hot Sheet
Price: $67.38 -0.62%

Rating Summary:
    19 Buy, 6 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 21 | Down: 31 | New: 25
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BMO Capital downgraded Eli Lilly (NYSE: LLY) from Outperform to Market Perform with a price target of $64.00 (from $91).

Analyst Alex Arfaei commented, "We believe Sola’s failure in EXPEDITION-3 is clearly a meaningfully negative event as it significantly lowers Lilly’s long-term growth prospects. We’ve lowered our Alzheimer’s pipeline forecast from $6Bn by 2024 to ~$2Bn to reflect lower risk adjusted expectations. We now forecast that Lilly can grow revenues by a CAGR of 3% from 2016 to 2020, below guidance of ~5% because of more cautious views for the diabetes franchise. We forecast ~12% EPS growth through 2020, and now value the stock at ~$64/share. Hence, we are downgrading LLY to Market Perform. This note contains our updated model and scenarios excluding Sola."

For an analyst ratings summary and ratings history on Eli Lilly click here. For more ratings news on Eli Lilly click here.

Shares of Eli Lilly closed at $75.99 yesterday.



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