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Lilly target raised by Barclays

April 8, 2017

Barclays analyst, Geoff Meacham, reiterated his Overweight rating on shares of Eli Lilly (NYSE: LLY) and raised his price target to $90 after conversations with practicing rheumatologists lead him to believe Lilly is well positioned to grow over the intermediate term via volume rather than price. The analyst believes that this, when combined with projected operating leverage should drive steady, low double-digit EPS growth.

Key points from the conversations include:
1) rheumatologists continue to consider baricitinib as preferable to Xeljanz based on the improved safety profile
2) they have become more comfortable prescribing Xeljanz despite safety concerns
3) they believe patient concerns over safety remains a challenge to using Xeljanz
4) they predict baricitinib will become the primary JAK inhibitor in RA, but feel the rate of uptake will depend on the label
5) while the RA competitive landscape is likely to become increasingly crowded, a significant unmet need remains

The new PT of $90 is up from $85.


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