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Pro Analysis

Buy Eli Lilly on promising new drugs and rising profitability, Morgan Stanley says

Eli Lilly production
Frederick Florin | AFP | Getty Images
Eli Lilly production

Morgan Stanley raised its rating for Eli Lilly to overweight from equal weight, citing the potential of its product pipeline and improving profit margins in the coming years.

"Lilly's new product growth drivers are in place, and we believe Lilly's guidance is low risk and achievable. Additionally, Lilly has a history of providing conservative guidance," analyst David Risinger wrote in a note to clients Friday.

"We expect outperformance to be driven by new product growth and execution on margin expansion."