Merrill Lynch Makes Changes to US 1 List Amid Market Turmoil

Eli Lilly

This stock checks in at high on the global pharmaceutical lists at many top Wall Street firms and is the only large cap pharmaceutical on the Merrill Lynch US 1 list. Eli Lilly and Co. (NYSE: LLY) is somewhat surprisingly out of consensus with portfolio managers at mutual fund and hedge funds. It also has more Neutral ratings than Buy ratings on Wall Street.

New cancer drug Cyramza recently won FDA approval for label expansion. It treats patients suffering from metastatic colorectal cancer. This was the fourth Cyramza approval in a year; it already has approval to treat advanced or metastatic gastric or gastroesophageal junction adenocarcinoma and metastatic non-small cell lung cancer. Cyramza has so far generated sales of $67.5 million.

The Merrill Lynch team and other analysts on Wall Street love the company’s product pipeline and point to Solanezumab for Alzheimer’s Phase 3 data, which had positive clinical results reported in late July, and Jardiance, the company’s drug for diabetes, CV data, which recently posted very positive clinical results. The recent Phase 3 data on Evacetrapib was very solid and just another positive for the company.

Shareholders are paid a solid 2.49% dividend. The $108 Merrill Lynch price target is well above the consensus target of $96.11. Shares closed Tuesday at $80.28.

Verizon Communications

This top telecommunications company recently did away with some phone incentives. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world. Verizon Wireless operates America’s most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

Wall Street has applauded Frontier’s acquisition of Verizon Communications’ wireline operations in California, Florida and Texas, which is expected to be completed at the end of March 2016. Many feel that focusing on the higher margin segments at the company makes sense, and the sale to Frontier is a huge cash boost to the balance sheet.

Verizon investors are paid a massive 5.19% dividend. The Merrill Lynch price target is $55, and the consensus price objective is $50.79. Shares closed Tuesday at $43.53.

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The market volatility has left all investors a touch shaken, but the chatter of a bear market and a collapse ring pretty hollow when the economy is not in recession. It is important to note, though, the days of low volatility and a constant upward trend are over for a while. Careful stock selection will be the key going forward.

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