Leerink sees Eli Lilly stock dip as buying chance, keeps $944 target

On Friday, Leerink Partners maintained a positive outlook on Eli Lilly stock (NYSE:LLY), reasserting an Outperform rating and a price target of $944.00. The firm’s stance came after Eli Lilly’s shares, currently valued at a market capitalization of $731.56 billion, experienced a significant drop the previous day. The decrease was attributed to CVS Caremark’s decision to prioritize Wegovy over Eli Lilly’s Zepbound, contributing to a notable 10.22% decline over the past week. According to InvestingPro data, the stock is currently trading near its Fair Value, with analyst price targets ranging from $650 to $1,190.

Leerink Partners commented on the market’s response to the news, suggesting that the sharp decline was an overreaction. The analysts at Leerink Partners have adjusted their projections for Zepbound in the United States, adopting a more conservative stance. However, they have increased their long-term forecasts for orforglipron, another drug in Eli Lilly’s portfolio. The company’s strong fundamentals are reflected in its impressive 32% revenue growth and robust gross profit margin of 81.31%. InvestingPro analysis shows the company maintains a GREAT financial health score, with particularly strong profitability metrics.

Eli Lilly’s stock movement on Thursday was notable, as it came on the heels of CVS Caremark’s announcement, which appeared to favor a competing drug over Zepbound. Despite this development, Leerink Partners believes that the fundamentals of Eli Lilly are still strong and that the current lower stock price presents an opportunity for investors.

The firm’s analysis took into account the latest competitive dynamics in the pharmaceutical market but concluded that the long-term outlook for Eli Lilly’s revenue and earnings is stable. This perspective underscores Leerink Partners’ confidence in the company’s future performance, despite the immediate market reaction.

In summary, Leerink Partners has reiterated its confidence in Eli Lilly by maintaining its Outperform rating and a price target of $944.00. The firm views the recent drop in stock price as a chance for investors to engage with the stock, considering the long-term potential of Eli Lilly’s drug pipeline, despite the short-term impact of CVS Caremark’s decision. For deeper insights into Eli Lilly’s valuation and growth prospects, investors can access comprehensive analysis and 15+ additional ProTips through InvestingPro’s detailed research reports, which provide expert analysis on what really matters for this pharmaceutical giant.

In other recent news, Eli Lilly reported its first-quarter 2025 results, highlighting a 45% year-over-year revenue increase driven by strong sales of key products, despite missing earnings per share (EPS) forecasts. The company reported an EPS of $3.34, below the expected $3.46, which led to a negative market reaction. Eli Lilly has maintained its full-year revenue projection of $58-61 billion but adjusted its earnings forecast to $20.78 to $22.28 per share, below the anticipated $22.40. Meanwhile, CVS Caremark announced a partnership with Novo Nordisk (NYSE:NVO) to make Wegovy the preferred weight-loss medication for its members starting July 1, 2025. This decision has raised concerns from Eli Lilly’s CEO about the potential reduction in drug choices for consumers. Analysts from BMO Capital noted the strategic implications for Novo Nordisk, suggesting it as a move to regain market share amidst competition. Additionally, Eli Lilly’s ongoing developments include advancements in their pipeline and strategic investments in manufacturing and R&D.

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