Deutsche Bank And Stifel Differ On Outlook For Eli Lilly

Deutsche Bank and Stifel took differing positions on Eli Lilly and Co (NYSE: LLY) Thursday.

Analyst Gregg Gilbert at Deutsche Bank downgraded the stock from Buy to Hold and maintained a $75 price target.

Gilbert felt the stock had performed well in 2014 but little upside remained.  

“We continue to believe management has done and is doing the right things to maximize shareholder value, and we see good optionality tied to the longer-term pipeline. We see 2015 as an important “execution year” in which investors need to see good launch success for the recently-approved oncology and diabetes products,” according to Gilbert.
 
Meanwhile, analyst Jeffrey Holford at Jefferies upgraded the stock to Buy and raised the price target from $75 to $80.

Holford saw “margin expansion and anticipation of significant pipeline optionality in 2016 (evacetrapib; peak $5bn) driving the stock higher in 2015.”

Holford “had previously been concerned on the gross margin and expectations for an early read out on solanezumab. Now that these have been clarified by management, we have increased our mid to long term EPS estimates.”

“We are most excited about the read out of evacetrapib for high risk cardiovascular disease, potentially by the end of Q1'16, for which we expect peak sales of $5bn (consensus c$1bn). Additional catalysts for 2015 (Cyramza CRC, Ixekizumab, baricitinib) and 2016(solanezumab, IMC-3G3, CGRP, CXCR4) could also act as strong drivers for the shares,” according to the note from Jefferies.

Shares of Eli Lilly were up Thursday and recently traded at $70.63, a gain of 2.02 percent.