TLDR
- Bernstein analysts maintain “Outperform” rating for Eli Lilly with $1,100 price target
- Competitor Novo Nordisk enters triple-G drug space, validating Eli Lilly’s approach with Retatrutide
- Eli Lilly reported 32% revenue growth in 2024 with similar growth projected for 2025
- Company expanding globally with Mounjaro launch in India
- Retatrutide showing promising results beyond weight loss, including potential cancer applications
Eli Lilly continues to strengthen its position in the highly competitive weight management and diabetes treatment markets, with analysts showing confidence in the pharmaceutical giant’s strategy and pipeline. Recent developments highlight the company’s growth trajectory and the intensifying competition in the weight loss drug sector.
Bernstein analysts recently reiterated their “Outperform” rating for Eli Lilly (NYSE: LLY) with a price target of $1,100. This vote of confidence comes as the stock currently trades around $849.63, suggesting significant upside potential according to the analysts.
The endorsement arrives at a time when pharmaceutical rival Novo Nordisk is making moves in the triple-G mechanism space. Novo Nordisk has entered an exclusive licensing agreement with United Laboratories, a Chinese biotech firm, to develop UBT251, a GLP1/GIP/Glucagon triple agonist similar to Eli Lilly’s Retatrutide.
This deal involves a $200 million upfront payment, with potential milestone payments reaching $1.8 billion plus tiered royalties. United Laboratories will retain rights to China, Hong Kong, Macau, and Taiwan markets.
Bernstein analysts view Novo Nordisk’s entry into this space as validation of Eli Lilly’s approach with Retatrutide. Despite the possibility that UBT251 may offer improved weight loss benefits, the analysts favor Eli Lilly’s lead position with Retatrutide.
Growth and Performance
Eli Lilly has demonstrated impressive financial performance recently. The company reported revenue growth of 32% in 2024, reaching approximately $45 billion. This growth rate exceeds the average for similarly sized pharmaceutical companies.
The company’s guidance for 2025 projects similar growth, with forecasts indicating a 32% increase in revenue at the mid-point. This continued expansion is fueled by several key medications in Eli Lilly’s portfolio.
Eli Lilly’s strong performance is driven by multiple successful drugs. These include diabetes treatment Mounjaro, anti-obesity medicine Zepbound, Alzheimer’s treatment Kisunla (approved last year), and eczema medication Ebglyss.
The company also maintains a robust pipeline of drug candidates. This includes several promising anti-obesity and diabetes programs, oncology candidates, and even a gene therapy for genetic deafness that has shown encouraging early results.
Eli Lilly’s innovative capabilities have been its greatest asset over the years. This focus on innovation helps offset the inevitable patent expirations that affect all pharmaceutical companies.
Strategic Moves and Market Position
Eli Lilly recently expanded its global footprint by introducing Mounjaro in India. This strategic move positions the company to address rising obesity and diabetes rates in the country, putting Eli Lilly ahead of competitor Novo Nordisk in this important market.
Beyond weight management, Retatrutide is showing promise in other therapeutic areas. Bernstein SocGen Group highlighted pre-clinical data suggesting Retatrutide may reduce tumor progression in cancer models, potentially offering superior benefits compared to existing incretin-based treatments.
The company has also established itself as a top player in the rapidly growing market for weight management medicines. Its current lineup is helping drive impressive revenue growth that stands out even among large pharmaceutical companies.
Despite having a relatively modest dividend yield of 0.7% (compared to the S&P 500’s average of 1.3%), Eli Lilly has increased its dividend payouts by 200% over the past decade. This makes it an attractive option for dividend growth investors.
With a market capitalization of $763 billion and a 55-year track record of consecutive dividend payments, Eli Lilly demonstrates strong market presence and financial stability.
Other analysts also maintain positive outlooks on Eli Lilly. Jefferies has a “Buy” rating with a $1,020 price target, emphasizing the upcoming ACHIEVE-1 Phase 3 trial results for diabetes treatment Orfo, expected in the second quarter.
UBS analysts have mixed perspectives, with one maintaining a “Neutral” rating and another a “Buy” rating, both with a $1,100 price target. UBS noted an uptick in Zepbound prescriptions, though recent quarterly performances for both Zepbound and Mounjaro fell short of expectations.
Eli Lilly’s stock has shown strong momentum over the past year, delivering a 12.6% return. Analyst targets for the stock currently range from $620 to $1,190, reflecting varied but generally positive outlooks on the company’s future performance.
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