Eli Lilly’s Potential for Stratospheric Growth
Morgan Stanley, in a recent research note, has expressed optimism about Eli Lilly’s (NYSE:LLY) potential for stratospheric growth. The investment bank pondered whether the weight-loss drugmaker could be the first biopharma stock to join the illustrious $1 trillion club. Fueled by robust demand for its diabetes and weight-loss drugs – Mounjaro and Zepbound, the Indianapolis-based company has seen its market capitalization skyrocket to over $719 billion in the past year, surpassing Tesla (TSLA).
Analyst’s Projections and Market Position
“Could Lilly be the first $1 trillion biopharma stock?” questioned Morgan Stanley analyst Terence Flynn and the team in their note. According to Bloomberg, the investment bank also increased its price target on LLY from $805 to $950, the highest on Wall Street, implying a market cap close to $900 billion. With an Overweight rating on LLY, the bank remains bullish, seeing a clear path for further upside, positioning LLY as the most valuable healthcare company in the U.S. and the ninth most valuable S&P 500 component, trailing tech giants such as Microsoft (MSFT) and Apple (AAPL) which have already surpassed the $1 trillion milestone.
Competitors and Industry Landscape
Eli Lilly’s Danish rival, Novo Nordisk (NVO), has also made significant strides, becoming Europe’s most valuable company following a remarkable over 72% rise last year. Both companies are capitalizing on the growing demand for the new GLP-1 class of drugs for diabetes and obesity, with Novo Nordisk being the maker of GLP-1s, Ozempic, and Wegovy.
Future Outlook and Investor Sentiment
Morgan Stanley’s analysts foresee a promising future for LLY beyond 2025, especially with its oral GLP-1 agonists. They advocate for a premium multiple for the stock’s outer-year forecasts compared to historical multiples for pharma stocks. Last month, Norges Bank Investment Management, the world’s largest sovereign wealth fund, also projected that Eli Lilly (LLY) and Novo (NVO) could be the first healthcare stocks to achieve the $1 trillion milestone in market cap.
