What happened
A new take on Eli Lilly (LLY -0.75%) stock by a prominent bank sent the pharmaceutical company's share price 3% higher on Monday. A Wells Fargo analyst upped his recommendation on the stock, and the market took that to heart. That 3% uptick was more than good enough to beat the nearly 0.2% slump of the bellwether S&P 500 index on the day.
So what
The prognosticator, Mohit Bansal, lifted his recommendation by one peg; he now thinks Lilly is worthy of an overweight ranking ("buy," in other words), up from his previous call of equal weight (or "hold"). Bansal also cranked his price target on the stock higher, to $375 per share from the preceding $360.
The analyst noted that the company is suffering from recent share-price weakness, which in his view is undeserved and has thus created an opportunity to grab the stock for cheap.
In his latest note on the storied pharmaceutical sector mainstay, Bansal wrote, "We think fundamentals of the company remain the same, and at current levels risk/reward into [the] donanemab Alzheimer's trial may be skewed to the upside."
Lilly has high hopes for donanemab, as Alzheimer's has proved to be a tough disease to fight and it is relatively widespread.
Now what
Lilly has been in the headlines lately, following its decision to cap the out-of-pocket price of insulin -- a long-standing product in its large portfolio -- at a very modest $35. Although the diabetes medication remains an important revenue source for the company, it isn't make or break. Last year, for example, it contributed roughly 11% to total sales.
