Eli Lilly (NYSE:LLY) has been a standout name over the past couple of years, with its strong position in the booming trend of weight-loss drugs contributing to its impressive performance.
With a strong 51% year-to-date gain, Eli Lilly is on the verge of becoming the first pharmaceutical giant to reach a $1 trillion market cap. The question is, will the upcoming Q3 results propel its current $800 billion valuation to that historic milestone?
Ahead of the readout at the end of the month (October 30), J.P. Morgan analyst Chris Schott certainly thinks the stock has more room to run.
“While shares trade at a significant premium to peers, we see unprecedented growth for LLY over the next decade led by the company’s incretin franchise,” the analyst opined.
That said, Schott keeps a lid on expectations for the quarter, noting: “Overall, we are expecting a healthy ramp in sales in 3Q (solid US Zepbound (obesity) TRx growth and strong ex-US ramp of Mounjaro (type 2 diabetes)) but our forecasts are nonetheless below consensus.”
For the quarter, Schott forecasts sales of $11.8 billion (falling $475 million short of consensus) and EPS of $4.27 (missing the Street’s estimates by $0.24).
However, that’s where any caution ends, as moving forward Schott’s stance gets more bullish, trumping Street expectations. Schott is expecting a significant increase in Mounjaro/Zepbound volumes in Q4 as US capacity expands with the launch of Zepbound vials, along with the ongoing international adoption of Mounjaro Kwikpens. As such, his forecast for both Q4 and 2025 is above consensus.
Looking at the bigger picture, Schott remains firmly in the pharma giant’s corner. “LLY remains one of our favorite names in the group as we see further upside to Street estimates as injectable capacity ramps, orforglipron comes to market and outcomes data supports broad use of obesity medications,” the analyst said.
There are also some notable catalysts to consider including health outcomes data for tirzepatide, ongoing improvements in manufacturing capacity, and phase 3 data readouts for orforglipron (expected mid-2025) and retatrutide (in 2026).
All in all, Schott rates LLY shares an Overweight (i.e., Buy) with a $1,100 price target, which implies a 24% upside from current levels. (To watch Schott’s track record, click here)
Most on the Street agree that LLY shares are still ripe for the picking. The stock claims a Strong Buy consensus rating, based on 18 Buys vs. 2 Holds. Going by the $1,049.18 average price target, a year from now, shares will be changing hands for an 18.5% premium. (See LLY stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
