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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 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 (LLY) 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 -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.
By Davit Kirakosyan
