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Investing.com - Morgan Stanley (NYSE:MS) maintained its Overweight rating and $1,135.00 price target on Eli Lilly (NYSE:LLY) in a research note focused on the expanding market for GLP-1 medications. The stock, which has seen a 16% decline over the past week, maintains a strong Buy consensus among analysts with targets ranging from $650 to $1,190. According to InvestingPro, eight analysts have recently revised their earnings expectations upward for the upcoming period.
The investment firm believes the GLP-1 market is at an "inflection point" with usage broadening beyond early U.S. adopters to larger patient populations globally. Morgan Stanley projects a peak obesity total addressable market of approximately $150 billion in its base case. This growth potential is reflected in Eli Lilly’s impressive 36% revenue growth over the last twelve months, with analysts forecasting 34% growth for the upcoming fiscal year.
Five key factors are expected to drive global penetration: greater injectable supply availability, expanded payer coverage and access, introduction of oral GLP-1 medications, clinical benefits in new diseases, and the development of next-generation molecules.
Current GLP-1 adoption within the eligible obesity population stands at just 2-3% in the U.S. (compared to approximately 15% in Type 2 diabetes) and about 1% outside the U.S. Morgan Stanley’s peak estimates project this reaching approximately 20% in the U.S. and 10% internationally.
The 2-3% U.S. obesity penetration figure aligns with a recent JAMA publication that analyzed a nationwide electronic health record dataset covering 277 million patient records from over 280 U.S. healthcare systems. With an exceptional gross profit margin of 82% and strong market position, Eli Lilly appears well-positioned to capitalize on this opportunity. For deeper insights into Eli Lilly’s growth potential and comprehensive analysis, access the detailed Pro Research Report available on InvestingPro, which offers expert analysis of 1,400+ top stocks.
In other recent news, Eli Lilly reported its second-quarter earnings for 2025, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $6.31, exceeding the forecasted $5.59. Additionally, Eli Lilly’s revenue reached $15.56 billion, surpassing predictions of $14.67 billion. Despite these strong financial results, Jefferies lowered its price target for Eli Lilly to $905.00 from $1,057.00. The adjustment followed disappointing clinical trial results for Eli Lilly’s obesity drug, orforglipron. The ATTAIN-1 72-week obesity trial showed an 11.2% absolute weight loss at the 36 mg dose, which did not meet expectations. Jefferies maintained a Buy rating on the stock despite the price target reduction. These developments reflect the mixed sentiment surrounding Eli Lilly’s recent performance and future prospects.
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