valuation more attractive, according to a Morgan Stanley analyst. ” data-reactid=”19″>Eli Lilly And Co (NYSE: LLY) stock has pulled back in recent months, rendering its valuation more attractive, according to a Morgan Stanley analyst.
NVO), Risinger said in a Thursday note.
This has rendered the forward P/E in line with the five-year average, the analyst said.
Fundamentally, Lilly is likely to outperform, driven by long-term growth prospects, positive Phase 3 tirzepatide results starting in the fourth quarter and rising enthusiasm for its Alzheimer’s pipeline, he said.
The consensus estimates underappreciate Lilly’s long-term revenue and EPS growth potential, Risinger said.
Morgan Stanley’s 2025 revenues and EPS estimates are both 7% above the consensus, the analyst said.
Tirzepatide could be best-in-class for glucose lowering, weight loss and cardiovascular risk, he said.
Risinger sees peak sales potential for the candidate as reaching $10 billion. Beyond diabetes, tirzepatide could become a leading prescription drug for obesity, the analyst said.
Among other catalysts, Lilly has four proof-of-concept results from its early stage diabetes pipeline coming in 2021, he said.
“Lilly’s Alzheimer’s pipeline represents an inexpensive call option, in our view.”
The analyst estimates only $725 million in risk-adjusted Alzheimer’s pipeline sales in 2025.
aducanumab could be a perception positive for Lilly, as a regulatory nod could suggest a low regulatory bar for Alzheimer’s, he said.” data-reactid=”35″>An FDA approval for Biogen Inc’s (NASDAQ: BIIB) highly controversial Alzheimer’s investigational drug aducanumab could be a perception positive for Lilly, as a regulatory nod could suggest a low regulatory bar for Alzheimer’s, he said.
Lilly has two Alzheimer’s candidates — N3PG and tau antibody — set to report Phase 2 data in 2021, Risinger said.
With Morgan Stanley assuming only 5% odds of success for each, the risk-reward is skewed to the upside, the analyst said.
As such, Morgan Stanley increased its estimates for Lilly’s key franchises and extended its model.
The Week Ahead In Biotech: Bristol-Myers Squibb FDA Decision, Adcom Review For Glaxo, Amarin Vascepa Hearing ” data-reactid=”41″>The Week Ahead In Biotech: Bristol-Myers Squibb FDA Decision, Adcom Review For Glaxo, Amarin Vascepa Hearing
Latest Ratings for LLY
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Sep 2020 | Morgan Stanley | Upgrades | Equal-Weight | Overweight |
| Aug 2020 | Morgan Stanley | Maintains | Equal-Weight | |
| Jun 2020 | JP Morgan | Maintains | Overweight |
View Article Origin Here
