UPDATE: Cowen & Company Upgrades Eli Lilly and Company to Outperform, Raises PT to $68.00 - Eli Lilly and Co (NYSE:LLY)

On Thursday, Cowen & Company upgraded shares of Eli Lilly

LLY

from Market Perform to Outperform and raised the price target from $61 to $68. The upgrade comes two days after a district court in Indiana upheld the vitamin dosage regimen patent on Alimta, which expires in 2022. Analyst Steve Scala expects an appeal in the next 30 days, which represents a risk, “albeit not near term.” Scala added $1 billion to his 2017-18 Alimta sales estimates and raised his earnings per share forecast for 2017 and beyond as follows:

+$0.60 to $4.85 in 2017
+$0.80 to $5.10 in 2018
+$0.30 to $5.50 in 2020
Note:Scala lowered the 1Q14 EPS estimate by $0.02 to account for the R&D tax credit not passing during the quarter.

The analyst believes “Lilly's guidance for SG&A as a percentage of sales of 28-30% and R&D as a percentage of sales of 18-20% could be achieved before consensus expectations of 2019.” Scala also expects Eli Lilly's late stage pipeline to generate increased news flow. Shares are down 0.5 percent to $58.85 in Thursday's trading.

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