Headquartered in Indianapolis, Indiana, Eli Lilly and Company (LLY) stands out as a prominent biopharmaceutical firm boasting a market cap of $789.4 billion. The company is committed to developing innovative treatments for complex health issues, focusing mainly on diabetes, oncology, immunology, and neuroscience. Eli Lilly’s mission is to enhance the lives of patients worldwide through advanced research and development.
Yearly Performance Insights
Although Eli Lilly’s shares have lagged behind the broader market in the past year, the stock has still gained 34.3%. In comparison, the S&P 500 Index ($SPX) has seen a nearly 36.8% rise during this period. In 2024, however, LLY has outperformed with a gain of 42.7% against SPX’s 25.7% increase year-to-date.
Sector Comparisons
When looking closer, LLY has also surpassed the performance of the iShares U.S. Pharmaceuticals ETF (IHE), which recorded 13.3% returns year-to-date and 19.9% gains over the last year.
Driving Force Behind Growth
Growth at Eli Lilly is largely driven by high demand for its flagship medications, including Mounjaro (used to treat type 2 diabetes) and Zepbound (for weight loss). These products have significantly boosted sales, especially following FDA approvals for critical drugs like Omvoh and Jaypirca. This growth is also attributed to strategic investments in research and development as well as expanded manufacturing capabilities.
Recent Earnings Report
Despite a strong product lineup, Eli Lilly’s shares fell by 6.3% after the company announced its Q3 earnings on October 30, which fell short of Wall Street expectations. Although its major drugs performed well, reduced inventory levels in the U.S. negatively affected overall results. Despite this dip, analysts remain optimistic about the growth potential of Lilly’s treatments for diabetes, obesity, and Alzheimer’s disease.
Analyst Expectations
For the fiscal year ending in December, analysts predict LLY’s earnings per share (EPS) will grow 109% to $13.21 on a diluted basis. Eli Lilly’s earnings surprise track record is inconsistent; it has exceeded consensus estimates in three of the last four quarters while missing in one instance.
Among the 25 analysts covering LLY stock, the consensus rating is a “Strong Buy,” which derives from 21 “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
Analyst Recommendations
This outlook reflects more positivity than it did three months ago, when only 18 analysts advised a “Strong Buy.” On November 5, Srikripa Devarakonda from Truist Financial reaffirmed a “Buy” rating on Eli Lilly, setting a price target of $1,029, indicating a 23.7% potential increase from current levels.
The average price target of $1,019.83 suggests a 22.6% premium to LLY’s current price. Furthermore, the street-high target of $1,250 implies a remarkable upside potential of 50.3%.
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On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
