Bristol-Myers (NYSE:BMY), Merck (NYSE:MRK) & Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY) Favorites in Wells (NYSE:WFC) Pharma Universe

Wells Fargo (NYSE:WFC) upgraded the pharma sector to "Overweight," with the top companies in their coverage universe being Bristol-Myers (NYSE:BMY), Merck (NYSE:MRK) & Pfizer (NYSE:PFE) and Eli Lilly (NYSE:LLY).

Wells stated, "We are upgrading our Sector Rating on Large Cap Pharmaceuticals to Overweight from Market Weight. Our recommendation change is predicated on potential positive near-term pipeline news, current trough valuation, and continued right-sizing of the companies.

"The patent cliff is finally here, but continued right-sizing could mitigate impact...The sector is trading at near trough valuation, in our view...Dividend yield and share repurchases could provide downside protection."

Bristol-Myers (BMY) closed Tuesday at $25.76, down $0.08, or 0.31 percent. Merck (MRK) closed at $33.87, losing $0.36, or 1.05 percent. Pfizer (PFE) ended the session at $18.38, gaining $0.04, or 0.22 percent. All of those are rated "Outperform" by Wells.

Eli Lilly (LLY), which is rated "Market Perform" by Wells Fargo (WFC), closed the day at $34.79, down $0.12, or 0.34 percent.