Jefferies Downgrades Eli Lilly (LLY) to Underperform; Expect Sola Fail

Jefferies downgraded Eli Lilly (NYSE: LLY) from Hold to Underperform with a price target of $35.00 (from $37.00).

Analyst, Jeffrey Holford, said, "We expect that solanezumab (sola) will outright fail its pivotal studies in Alzheimer's disease, due to read out in Q3'12, with only a 25% chance of being effective in a niche population. On this basis, as the likely structural deterioration in dividend cover becomes more visible and relevant once again, we would expect the shares to trade towards a valuation of $35 (20% downside), warranting a downgrade."

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 $44.37 yesterday.

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