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On Tuesday, Bernstein analysts maintained a positive outlook on Eli Lilly (NYSE:LLY) shares, reiterating an Outperform rating and a $1,100.00 price target. The endorsement comes amid the pharmaceutical giant’s strategic moves to strengthen its manufacturing presence in the United States. With a substantial market capitalization of $734.57 billion and impressive revenue growth of 32% over the last twelve months, Eli Lilly stands as a dominant force in the pharmaceutical sector. According to InvestingPro analysis, the company currently trades above its Fair Value, reflecting strong market confidence in its growth prospects. Analysts highlighted Eli Lilly’s capacity to forge a significant bespoke deal with the U.S. administration, leveraging planned capital expenditures and its ability to make new manufacturing decisions. The company’s focus is on expanding its production capabilities for peptides and small molecules domestically.
Eli Lilly has already committed to $27 billion in U.S.-directed capital expenditures, with recent developments on Friday revealing that its new growth driver, Orforglipron, will also be manufactured in the U.S. This aligns with the company’s strategy to bolster its growth through new drug approvals and to meet its robust growth expectations. InvestingPro data reveals the company’s strong financial foundation, with a remarkable 55-year track record of maintaining dividend payments and projected revenue growth of 32% for FY2025. Despite the reliance on these approvals, analysts foresee a sustainable growth trajectory for Eli Lilly, projecting more than 10% growth extending to 2031.
The analyst’s commentary sheds light on the potential for Eli Lilly to navigate the current market environment effectively. "Our top pick still holds, we see LLY as being able to negotiate a meaningful bespoke deal with the administration based on manufacturing capex-planned & ability to make incremental new manufacturing decisions as they expand for both peptides and small molecules to localize this towards the US," said Courtney Breen from Bernstein SocGen Group.
The statement further emphasized the strategic importance of the new growth driver, Orforglipron, and its production in the U.S., which is seen as a positive development for Eli Lilly. The company’s proactive approach to expanding its manufacturing footprint in the U.S. is perceived as a key factor in sustaining its growth momentum over the next decade.
Analysts believe that even if the pace of new approvals decelerates, Eli Lilly’s growth prospects remain strong. The company’s forward-looking investments and manufacturing strategies are expected to support its ambitious growth targets, providing a solid foundation for its performance in the pharmaceutical industry. InvestingPro shows a robust Financial Health Score of "GREAT," with analyst consensus remaining firmly bullish. For deeper insights into Eli Lilly’s valuation and growth metrics, including over 15 additional ProTips and comprehensive analysis, investors can access the full Pro Research Report on the platform.
In other recent news, Eli Lilly has reported promising results from its Phase 3 trial for orforglipron, an oral medication for type 2 diabetes, leading to a surge in investor interest. The ACHIEVE-1 trial demonstrated significant improvements in glycemic control and weight loss, positioning orforglipron as a potential game-changer in diabetes treatment. Eli Lilly plans to submit regulatory filings for the drug by the end of 2025, with an anticipated approval in 2026. Analysts at Cantor Fitzgerald have initiated coverage with an Overweight rating and a price target of $975, citing strong clinical data and commercial performance. BMO Capital Markets has maintained an Outperform rating, though they adjusted their price target to $900, citing macroeconomic pressures. Leerink Partners also reiterated an Outperform rating with a $989 price target, highlighting the drug’s comparable efficacy to existing treatments. The company has been strategically preparing for the launch, with significant inventory investments noted. These developments underscore Eli Lilly’s strong positioning in the diabetes and obesity markets, with analysts expressing confidence in the company’s growth trajectory.
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