Eli Lilly (NYSE:LLY) might be focused on helping people shed pounds with its weight loss drugs, but ironically, its stock has bulked up with a 52% gain year-to-date.
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This trend continued after the pharma giant’s recent Q2 earnings report, with shares climbing higher in the aftermath. It’s easy to see why: the company delivered a strong performance, exceeding expectations on both revenue and earnings, and once again raised its guidance for the rest of the year.
LLY’s Mounjaro (diabetes) and Zepbound (weight loss) were the stars of the show with the former’s sales showing a threefold increase from the same period a year ago, reaching $3.1 billion vs. the Street’s forecast of ~$2.4 billion, while the latter raked in $1.2 billion, outpacing the $818.9 million consensus estimate.
Morgan Stanley analyst Terence Flynn was already a big fan, but the latest readout has only strengthened his conviction on LLY.
“Following 2Q results, we now see greater levels of upside to our near-term Mounjaro+ Zepbound estimates (our ’24-26 estimates go up 9%/23%/31% and are now 29%/62%/66% ahead of pre-quarter consensus), as well as having greater confidence in the supply outlook,” the 5-star analyst said.
Moreover, with the Phase 3 data for oral GLP-1 drug orforglipron expected around mid-2025, Flynn, who holds high expectations for the drug, believes investors will increasingly focus on its potential to drive the company’s next product cycle and boost 2026+ estimates. The drug could deliver several years of growth, particularly as it will be the only oral option on the market without supply constraints.
“Taken together,” Flynn goes on to say, “we believe LLY offers the most attractive opportunity in our coverage for upside to consensus estimates, despite the stock’s outperformance. LLY continues to have the strongest growth profile within our coverage universe.”
That’s reason enough for Flynn to make LLY a Top Pick while the analyst has also raised his price target from $1,083 to $1,106, suggesting shares will climb another 25% from current levels. Needless to say, Flynn’s rating stays an Overweight (i.e., Buy). (To watch Flynn’s track record, click here)
Flynn’s enthusiasm is echoed by most of his colleagues. The stock boasts a Strong Buy consensus rating, based on 15 Buy recommendations vs. 3 Holds. At $1,000.69, the average price target suggests shares will gain another 13% over the next 12 months. (See Eli Lilly 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.
