Eli Lilly's Stock Slumps After Morgan Stanley Downgrade

Eli Lilly & Co.'s stock slumped 2.8% in afternoon trade Wednesday, pulling back from Monday's record close, after Morgan Stanley downgraded the drug giant on concerns over valuation. Analyst David Risinger cut his rating to equal weight, after being at overweight for the last seven months, but raised his stock price target to $93 from $85, which was 1.5% below current levels. The stock has run up 25% year to date, compared with a 12% rise in the NYSE Arca Pharmaceutical Index . Risinger said he believes current prices reflect increasing investor optimism surrounding Lilly's Alzheimer's and cholesterol drug candidates. He believes this rally has made the stock's risk-versus-reward profile more balanced, as he's uncertain how investors will react to the release of extension study results from its Alzheimer treatment solanezumab on July 22.