The stock of pharmaceutical giant Eli Lilly (LLY) has received another downgrade of sorts, this time by analysts at HSBC bank (HSBC).
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
The analysts cut their price target on LLY stock to $675 from $700 while maintaining a Sell-equivalent reduce rating on the shares. It was the second time in a month that HSBC has ratcheted down its price target on Eli Lilly’s stock.
At the end of April, the British bank downgraded LLY stock from a Buy rating to reduce, and significantly lowered the price target on the shares to $700 from $1,150. The newly revised price target of $675 is 10% lower than where the shares currently trade.
‘Priced for Perfection’
In downgrading Eli Lilly, HSBC said that the stock is “price for perfection” with little room for error. The analysts also noted that LLY stock is richly valued, trading at 61 times future earnings estimates. Should Eli Lilly make any missteps in its upcoming earnings, the share price is likely to pullback, noted the analysts.
Concerns have also been raised about U.S. President Donald Trump’s import tariffs and pledge to lower prescription drug prices for American consumers, efforts that could impact Eli Lilly’s future profits. Analysts have said that there is growing uncertainty surrounding the pharmaceutical industry.
LLY stock has declined 2% this year.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy recommendation among 19 Wall Street analysts. That rating is based on 17 Buy, one Hold, and one Sell recommendations issued in the last 12 months. The average LLY price target of $989.07 implies 31.77% upside from current levels.
