Market Overview

Argus Shares Eli Lilly's Optimism, Upgrades To Buy

Share:
Argus Shares Eli Lilly's Optimism, Upgrades To Buy

If an 8-percent quarterly dividend increase is any indication, Eli Lilly and Co (NYSE: LLY) is confident of its growth potential.

Its optimism echoes with one Wall Street analyst. 

The Rating

Argus analyst David Toung upgraded Eli Lilly from Hold to Buy with a $115 price target.

The Thesis

Toung sees 2018 growth catalysts in potential regulatory approvals, new products, indication expansions for existing treatments and a possible spinoff of the Elanco animal health business. (See the analyst's track record here.) 

The Food and Drug Administration is expected to rule on baricitinib for rheumatoid arthritis, galcanezumab for migraine prevention and Verzenzio as a first-line breast cancer treatment by the middle of 2018.

Toung has particular optimism for baricitinib, which is already approved in Europe. Rival treatments in Pfizer Inc. (NYSE: PFE)’s Xeljanz and AbbVie Inc (NYSE: ABBV)’s Humira respectively seized $793 million in the U.S. in the first three quarters of 2017 and $4.8 billion worldwide annually for the rheumatoid arthritis indication.

The launches of Verzenzio as a second-line breast cancer treatment and Taltz for active psoriatic arthritis are expected to drive additional growth, the analyst said. 

“To be sure, Lilly is coping with slower sales of mature products that face patent expiration and the loss of exclusivity,” Toung said, noting slower sales in Cialis, Forteo and Effient. “However, we expect it to generate low double-digit EPS growth from margin expansion and the new products mentioned above.”

Trulicity, Basaglar, Jardiance, Cyramza and Lartruvo are forecasted to further offset sales declines in established products, Toung said. 

Price Change

At the time of publication, Eli Lilly was trading up nearly 1 percent at $86.26. 

Related Links:

7 Catalysts For Eli Lilly Over The Next Year

Attention Biotech Investors: Brace For These January PDUFA Events

Latest Ratings for LLY

DateFirmActionFromTo
Oct 2019MaintainsBuy
Oct 2019ReinstatesBuy
Sep 2019ReiteratesNeutral

View More Analyst Ratings for LLY
View the Latest Analyst Ratings

Posted-In: Argus Research David ToungAnalyst Color Upgrades Health Care Price Target Analyst Ratings General Best of Benzinga

 

Related Articles (LLY + ABBV)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Cisco's Transition Leads To Bank Of America Upgrade

Teva Vs Mylan: Wells Fargo Weighs In