Eli Lilly Cut to “Underperform” at Jefferies; Expects Alzheimer’s Drug to Fail in Trials (LLY)
Pharmaceuticals maker Eli Lilly & Co. ( LLY ) on Monday received a big downgrade from anlaysts at Jefferies & Co.
The firm slashed its rating on LLY from "Hold" to "Underperform" with a $35 price target, suggesting a big 21% downside to the stock's Friday closing price of $44.37.
Jefferies noted it expects Lilly's new Alzheimer's treatment, called solanezumab, to fail its pivotal studies. The company is expected to release data from recently-completed late-stage trials in August.
The analyst commented, "We expect that solanezumab will outright fail its pivotal studies in Alzheimer's disease…with only a 25 percent chance of being effective in a niche population."
Eli Lilly shares were mostly flat in premarket trading Monday.
The Bottom Line
Shares of Eli Lilly ( LLY ) have a 4.42% dividend yield, based on Friday's closing stock price of $44.37. The stock has technical support in the $40 price area. If the shares can firm up, we see overhead resistance around the $45-$47 price levels.
Eli Lilly & Co. ( LLY ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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