Weight loss drugs (GLP-1), which often serve as diabetes drugs, are proving to be good business for several companies, and healthcare stock Eli Lilly (NYSE:LLY) is no exception. In fact, demand for these treatments is surging, and addressing that demand has become a challenge for Eli Lilly. However, its plans to address that growing demand sent Eli Lilly shares up modestly in Monday afternoon’s trading.
Mounjaro and Zepbound have been clear winners for Eli Lilly, which is actively moving to enhance its production lines and provide better patient access to obesity treatments. It’s also stepping in to improve education about obesity, according to departing CFO Anat Ashkenazi, who will be moving to become CFO of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) as of July 31.
Making more of the drug that regulates blood sugar and suppresses appetite is a priority for Eli Lilly. With the general market for GLP-1 agonists poised to clear $100 billion by the end of the 2020s, there’s a whole lot riding on such moves.
Potential in the NASH Market
Mounjaro is also showing signs of value in the non-alcoholic steatohepatitis, or NASH, market. NASH is a liver disease that doesn’t connect to alcohol abuse but rather to the development of fat in the liver. Given that the Food and Drug Administration only just approved a treatment for NASH this year, there’s plenty of room in that market for Eli Lilly.
Is Eli Lilly a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 16 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 97.95% rally in its share price over the past year, the average LLY price target of $878.88 per share implies 0.99% downside risk.
