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Investing.com - Guggenheim lowered its price target on Eli Lilly (NYSE:LLY) to $875.00 from $942.00 on Wednesday, while maintaining a Buy rating on the pharmaceutical giant’s stock. The $574 billion market cap company currently trades at a P/E ratio of 41.5, reflecting high growth expectations from investors.
The price target reduction follows Eli Lilly’s second-quarter 2025 earnings report, which beat expectations on both top and bottom lines, with the company raising its full-year guidance. The company demonstrated robust revenue growth of 36.8% over the last twelve months, with 8 analysts recently revising their earnings estimates upward according to InvestingPro. Despite the strong financial performance, investor attention shifted to clinical trial results for the company’s oral obesity drug orforglipron.
The first Phase 3 readout from the ATTAIN-1 trial showed weight loss results that came in slightly below Guggenheim’s expectations. The firm noted, however, that orforglipron’s earlier ACHIEVE-1 trial demonstrated a profile similar to 1mg Ozempic, particularly at lower doses.
Guggenheim characterized Eli Lilly as being in a "show me" period, with investors waiting to see how the GLP-1 market evolves around key products including tirzepatide, orforglipron, and retatrutide. The firm’s reduced price target reflects decreased forecasts for tirzepatide and orforglipron due to uncertainty around pricing and competitive dynamics.
Investors can expect full data from the SURPASS-CVOT and ATTAIN-1 trials at the European Association for the Study of Diabetes (EASD) conference in September, with the most anticipated data coming from the first Phase 3 retatrutide readout in the fourth quarter of 2025. For deeper insights into Eli Lilly’s valuation and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Eli Lilly reported second-quarter earnings that surpassed expectations, with notable beats on both revenue and earnings per share. Despite this strong financial performance, investor sentiment was affected by disappointing clinical trial data for Orforglipron, a weight loss drug candidate, which led to a significant drop in the company’s market capitalization. In legal developments, Eli Lilly is facing a lawsuit from the Texas Attorney General accusing the company of bribing healthcare providers to prescribe its medications, specifically mentioning GLP-1 drugs Mounjaro and Zepbound.
Analyst reactions to Eli Lilly’s recent developments have been mixed. JPMorgan reiterated its Overweight rating with a price target of $1,100, maintaining a positive outlook despite concerns over Orforglipron’s clinical trial data. Conversely, UBS lowered its price target to $895, citing concerns over the same data but retained a Buy rating. Morgan Stanley also maintained an Overweight rating with a price target of $1,135, highlighting the growth potential in the GLP-1 market, which they believe is expanding significantly. These varying analyst perspectives reflect the complexity of Eli Lilly’s current situation amidst both legal challenges and market opportunities.
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