Major US Pharma Sector Downgraded To Neutral At Barclays

An analyst downgraded major U.S. pharmaceuticals as a group Wednesday ahead of the upcoming second-quarter reporting period, saying the shares are generally at full value. The analyst, Barclay's Mark Purcell, also adjusted his outlook on a half-dozen companies in the sector, including upgrades for AbbVie Inc.

and Eli Lilly and Co.,

plus a downgrade for Bristol-Myers Squibb Co.

. Shares of each were little changed. Sector-wide, Purcell said prospects for modest growth in the sector "appear priced in," while expectations for the industry's new product pipeline are "relatively high." These factors, plus an "increasingly crowded commercial environment" suggest to Purcell that the sector will under perform the market in comparison with more cyclical stocks. A key stock index for the sector is up 19 percent in the year to date. Specifically, the NYSE Arca Pharmaceutical Index has bumped up to 948.63, after starting off 2014 at 788. On Wednesday afternoon, the index climbed 0.54 percent. Purcell upgraded AbbVie to Overweight from Equal Weight, citing the outlook for its Humiera drug while downgrading Bristol-Myers to Equal Weight from Overweight on competitive concerns in immunology. Also upgraded: Eli Lilly to Equal Weight from Underweight with a target boost to $63 from $51. Purcell also raised his target for Johnson & Johnson

to $102 from $99 maintaining an Equal Weight rating. For Merck & Co., Inc.

Purcell's target moved to $61 from $6 with a steady Equal Weight. Similarly for Pfizer Inc.,

his target moved to $34 from $32, with Equal Weight maintained.