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JPMorgan Resumes Coverage Of Eli Lilly: 'One Of The Best-Positioned Names In Our Group'

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JPMorgan Resumes Coverage Of Eli Lilly: 'One Of The Best-Positioned Names In Our Group'

Shares of big-cap pharma names have been on a solid uptrend since the second-quarter earnings season in late July.

Against this backdrop, Eli Lilly And Co (NYSE: LLY)'s prospects prompted a JPMorgan analyst to turn bullish on stock Wednesday. 

The Analyst

Analyst Christ Schott resumed coverage on Eli Lilly with an Overweight and year-end 2019 price target of $117.

The Thesis

Eli Lilly is "fundamentally one of the best-positioned names in our group," Schott said in a Wednesday note. (See his track record here.) 

The bull thesis is predicated on the healthy growth of core products including Trulicity, Taltz and Jardiance and the next wave of late-stage pipeline assets such as CGRP, tanezumab and GIP/GLP-1, the analyst said. 

JPMorgan projects that Eli Lilly will generate above-average topline growth of about 5-percent CAGR; significant margin expansion from 27 percent in 2018 to mid-30-percent by 2024; and health EPS growth of about 10 percent CAGR.

Schott named the following as near-term catalysts for the stock:

  • The readout from the Trulicity REWIND CV study due early in the early fourth quarter. 
  • Clinical data from GIP/GLP-1 program.
  • Phase 3 data from tanezumab due in late 2018 or early 2019.

The above catalysts could support upside to Street estimates, the analyst said.

Despite Lilly's strong run year-to-date, JPMorgan continues to see an attractive setup the stock. 

The Price Action

Eli Lilly shares have gained about 28 percent year-to-date.

Related Links:

BMO's Bearish Stance On Eli Lilly Comes To An End

Eli Lilly CEO Calls For Uniform Prices, Better Use Of Technology In Health Care

Latest Ratings for LLY

DateFirmActionFromTo
May 2019Initiates Coverage OnBuy
May 2019MaintainsOutperformOutperform
Apr 2019UpgradesHoldBuy

View More Analyst Ratings for LLY
View the Latest Analyst Ratings

Posted-In: Christ Scott JPMorganAnalyst Color Price Target Analyst Ratings Best of Benzinga

 

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