Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Amgen & Eli Lilly upgraded to Overweight at Wells Fargo, Merck downgraded to Equal Weight

Published 03/13/2023, 06:03 PM
Updated 03/13/2023, 06:35 PM
© Reuters.  Amgen & Eli Lilly upgraded to Overweight at Wells Fargo, Merck downgraded to Equal Weight

© Reuters. Amgen & Eli Lilly upgraded to Overweight at Wells Fargo, Merck downgraded to Equal Weight

By Davit Kirakosyan

Wells Fargo upgraded Amgen (NASDAQ:AMGN) and Eli Lilly (NYSE:LLY) while downgrading Merck (NYSE:MRK).

Amgen was upgraded to Overweight from Equal Weight with a price target of $265.00 (from $275.00) as the firm believes the pessimism related to the company post-Horizon Therapeutics (NASDAQ:HZNP) deal has caused weakness, and it now sees the stock trading approximately 7-8% below the worst-case scenario.

“After combining AMGN-HZNP, we see FV of the company at $247 in a no-Tepezza US growth scenario and modest growth in other parts; the stock is trading below this level. Our base case assumes modest US growth and $5B peak sales for HZNP which is much lower than prior HZNP guidance of $6.5B peak,” said the firm.

Shares gained more than 2% today.

Eli Lilly was upgraded to Overweight from Equal Weight with a price target of $375.00 (from $360.00) as recent weakness creates a buying opportunity.

The firm’s previous Equal Weight thesis was based on unfavorable risk/reward for donanemab Alzheimer's data in H1/23 and the stock being priced to perfection for diabetes/obesity franchise.

Wells Fargo believes that the stock, being down 18% (S&P 500 -5%) without fundamental change, presents a good opportunity, given a good R&D engine, absence of near-to-medium-term loss of exclusivity, and that it is not dependent on M&A for growth.

Shares rose 3% today.

Meanwhile, Merck was downgraded to Equal Weight from Overweight with a price target of $115.00 as the firm believes with the recent appreciation of stock, Merck seems fairly valued at ~16x 2023 PE given that it still has Keytruda-related LOE issues to solve.

Shares fell nearly 2% today.

 
 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.