Eli Lilly, Incyte, KLA-Tencor Downgraded

Eli Lilly, Incyte, and KLA-Tencor stocks received bearish analyst attention

Apr 17, 2017 at 10:16 AM
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Analysts are weighing in on drugmakers Eli Lilly and Co (NYSE:LLY) and Incyte Corporation (NASDAQ:INCY), as well as semiconductor testing stock KLA-Tencor Corp (NASDAQ:KLAC). Here's a quick roundup of today's bearish brokerage notes on shares of LLY, INCY, and KLAC.

Eli Lilly Stock Slammed by FDA Decision

LLY has plunged 4.3% to $82.16, after a dose of bad news. Specifically, the U.S. Food and Drug Administration (FDA) rebuffed the company's rheumatoid arthritis drug, baricitinib, citing safety concerns. The brokerage bunch has been quick to weigh in, with Goldman Sachs dubbing the rejection a "surprise." More significantly, BMO and Morgan Stanley downgraded Eli Lilly and Co to "underperform" and "equal weight," respectively. BMO also trimmed its price target to $71 from $73, while Credit Suisse lowered its outlook to $87 from $88. On the other hand, Cowen lifted its price target to $95 from $85 -- territory not explored since 2001. Today's sharp losses are a welcome development for short sellers, who have raised the bearish stakes of late. In the latest reporting period alone, short interest shot up 10.9%.

Incyte Follows Eli Lilly Lower

INCY, which partnered with LLY on baricitinib, is being hit even harder, down 11.2% at $125.13 -- and on the short-sale restricted list. Analysts are piling into the stock's bearish corner, too. Piper Jaffray downgraded the stock's rating to "neutral" from "overweight," and was one of at least six brokerage firms to slash its price target. That said, Incyte Corporation shares remain almost 61% higher on a year-over-year basis. Perhaps that's why 15 of 16 analysts heading into today maintained a "buy" or better opinion toward INCY stock, with not a single "sell" assessment on the books.

KLA-Tencor Stock Retreats on Downgrade

Susquehanna dropped KLAC's rating to "negative" from "neutral," pressuring the stock 0.7% to $94.68. Still, the shares are a chip-shot from their April 5 record high at $97.49, and remain up 20% in 2017. Speaking more broadly, analysts are almost evenly split toward KLA-Tencor Corp. On the one hand, five brokerage firms rate the stock a "strong buy," while on the other, three have designated it a tepid "hold," with one other dishing out a "strong sell" opinion.


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