According to Eli Lilly’s investor presentation, the company doesn’t expect the transaction to affect its dividend policy. Additionally, according to its M&A (mergers and acquisitions) conference call, the company expects a modest negative impact from the deal on its near-term margins, but it remains confident in achieving its 2020 operating income target of 31% of total sales. Finally, according to Eli Lilly’s investor presentation, the deal is expected to boost its revenues and margins in future years and to become cash accretive by 2022.
Target prices for Eli Lilly and Loxo Oncology
The 12-month consensus analyst recommendation for Eli Lilly as of January 8 is a “buy,” while it’s also a “buy” for Loxo Oncology. The 12-month consensus target price for Eli Lilly as of January 8 is $118.19, 2.52% higher than its closing price on January 7. The 12-month consensus target price for Loxo Oncology as of January 8 is $221.44, 4.82% lower than its last closing price on January 7. Eli Lilly’s offer price of $235 per share is 6.12% higher than the consensus target price forecast by Wall Street analysts for Loxo Oncology.
The highest target price estimate for Eli Lilly is $136, and the lowest target price estimate is $93. The highest target price estimate for Loxo Oncology is $235, and the lowest target price estimate is $185. Eli Lilly’s offer price of $235 per share matches the highest target price forecast by Wall Street analysts for Loxo Oncology.
Of the 17 analysts covering Eli Lilly on January 8, 47.06% have given it “buy” recommendations. On the other hand, of the 12 analysts covering Loxo Oncology on January 8, 50% have given it “buy” recommendations.
In the next article, we’ll discuss Eli Lilly’s revenue expectations from its acquisition of Loxo Oncology in greater detail.