Eli Lilly's Dividend Security Threatened

Jefferies International has published a research report on Eli Lilly (NYSE: LLY) as management believes growth will continue through organic pipeline development and stay strong.

In the report, Jefferies writes "We have updated our model following an operationally strong third quarter, despite lower than expected revenues. Management tightened 2010E revenue guidance upwards to mid single-digit growth from low-to-mid-single-digit growth previously, whilst maintaining prior guidance regarding the cost lines. The expected launch of generic Gemzar from the 15th of November, a lower impact from US Healthcare Reform in 2010 and no generic incursion of Strattera during 2010 are all assumed by management in the current guidance. As a result, we have adjusted our current 2010E sales and EPS estimates by -1% and 1%, respectively."

Jefferies maintains its Hold rating and has lowered the price target from $38.30 to $37.20.

Eli Lilly closed yesterday at $34.95.