Merrill Lynch downgraded Eli Lilly (LLY ) to near-term neutral from buy.
Analyst Steven Tighe says Lilly shares have broken through his designated price objective of $57. He says, at the current price, Lilly shares are trading at a 31% premium to the S&P 500, and at a 25% premium to the drdug group, based on his 2003 estimated earnings of $2.75. With uncertainty remaining with regard to manufacturing in the near term, Tighe says he's concerned that the risk/reward profile for Lilly is becoming more balanced.
Tighe sees $2.61 2002 earnings per share, and maintains his long-term buy rating.