September looms as a risk month for stocks, Yardeni says
On Monday, Truist Securities updated their financial model for Eli Lilly and Company (NYSE:LLY), leading to an increased price target on the pharmaceutical giant’s shares. The new price target is set at $1,038.00, up from the previous $1,029.00, while the firm maintained its Buy rating on the stock. According to InvestingPro data, Eli Lilly, with its current market cap of $727 billion, is trading at premium valuations, reflected in its high earnings multiple.
The adjustment comes as Eli Lilly provided updated fiscal year 2024 and announced fiscal year 2025 guidance. The company expects FY2024 revenue to be around $45 billion with fourth-quarter revenue projected at approximately $13.5 billion. Truist Securities noted that FY2024 sales are roughly 3% below the guidance range, attributing this to lower-than-expected channel inventory at the end of 2024. InvestingPro data shows strong momentum in Eli Lilly’s business, with revenue growing 27.4% in the last twelve months and analysts forecasting 33% growth for FY2024.
Looking ahead to FY2025, Eli Lilly anticipates revenue to be in the range of $58 to $61 billion. The company’s growth is expected to be driven by products such as Jaypirca, Ebglyss, Omvoh, and Kisunla, along with the market expansion of Mounjaro. Eli Lilly has also projected a strong sales trajectory for Mounjaro/Zepbound to continue into 2025. The company maintains a "GOOD" overall financial health score on InvestingPro, with particularly strong profitability metrics.
Additionally, Eli Lilly is preparing to increase its production capacity. The company expects to produce 60% more salable doses of incretins in the first half of 2025 compared to the first half of 2024. This ramp-up in production is aligned with the anticipated demand for its diabetes and obesity treatments.
Investors and analysts alike are awaiting the full fourth-quarter 2024 results, which are scheduled to be released on February 6, 2025. Truist Securities reaffirmed its confidence in Eli Lilly’s performance with the maintained Buy rating and the updated price target.
In other recent news, concerns have arisen about the future of Tectonic’s TX45 following the termination of a similar drug trial by Eli Lilly. Analyst firm Leerink maintains an ’outperform’ rating on Tectonic, despite these concerns. Meanwhile, Bernstein analysts have reiterated their ’Outperform’ rating on Eli Lilly, emphasizing the company’s robust growth and strong market position. BofA Securities also maintains a ’Buy’ rating on Eli Lilly, expressing confidence in the company’s strong market presence and financial health.
Novo Nordisk (NYSE:NVO), a competitor, has released promising trial results for its obesity treatment, amycretin, which showed significant weight loss in participants. These developments have put pressure on Eli Lilly, as Novo Nordisk’s advancements could potentially challenge Eli Lilly’s obesity drug, Zepbound. BofA Securities also retained its ’Buy’ rating on Novo Nordisk, indicating confidence in the company’s future performance and strategic decisions.
These are recent developments in the pharmaceutical industry, highlighting the interconnected nature of clinical research and the competitive landscape in obesity treatment.
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