UBS maintains Eli Lilly stock Neutral with $1100 target

On Monday, UBS analyst Trung Huynh maintained a Neutral rating on Eli Lilly (NYSE:LLY) shares, with a price target of $1100. With a market capitalization of $761.65 billion and a P/E ratio of 72.16, InvestingPro analysis suggests the stock is currently trading above its Fair Value. Huynh’s commentary focused on the company’s upcoming first quarter of 2025, noting that Eli Lilly had fallen short of expectations for its products Zepbound and Mounjaro in the previous two quarters. Despite these setbacks, there appears to be an uptick in total prescriptions (TRx), with Zepbound now accounting for 70% of new brand prescriptions (NBRx) compared to its competitor Wegovy, indicating sustained demand. This momentum has contributed to Eli Lilly’s impressive 32% revenue growth over the last twelve months, with the company maintaining strong financial health according to InvestingPro metrics.

The analyst also mentioned that with the recent availability of LillyDirect prescription data from February, they have adjusted the figures to account for the different formats of the medication, such as vials versus pens. Based on this TRx data, UBS’s estimates for Zepbound are now 2% higher than the consensus, while their estimates for Mounjaro are 2% lower. The overall sales forecast is broadly in line with consensus, with lower expectations for Verzenio and Mounjaro being partially offset by higher projections for Zepbound. The sentiment for the first quarter is largely dependent on the performance of GLP-1 products.

Looking beyond the immediate quarter, Huynh pointed out that the key event for Eli Lilly will be the release of the orfo diabetes data in the second quarter of 2025. The outcome of the ACHIEVE-1 study is highly anticipated, as positive results could position Eli Lilly as the provider of the first oral GLP-1 treatment for obesity. The analyst believes that while investors are currently waiting on the sidelines for the data readout, a successful outcome could significantly increase investor interest in the company. UBS estimates a 70% probability of success (PoS) for the trial. With analyst targets ranging from $620 to $1,190 and a consensus recommendation of 1.64 (Buy), detailed analysis and additional insights are available in the comprehensive Pro Research Report on InvestingPro.

In other recent news, Eli Lilly has introduced its diabetes and weight-loss drug Mounjaro in India, marking its entry ahead of competitor Novo Nordisk (NYSE:NVO). This launch comes as India faces increasing obesity and diabetes rates, with Mounjaro priced competitively in the market. UBS has maintained a Buy rating for Eli Lilly, projecting a $1,100 price target and highlighting a positive trend in prescriptions for Zepbound. Meanwhile, Bernstein SocGen Group reaffirmed an Outperform rating, citing promising pre-clinical results for Eli Lilly’s Retatrutide, which shows potential in reducing tumor progression in cancer models. Morgan Stanley (NYSE:MS) also maintained an Overweight rating with a $1,146 price target, noting Eli Lilly’s strong position in the competitive diabetes care market. Additionally, a U.S. federal judge denied an injunction that would have allowed the production of copies of Eli Lilly’s weight-loss medication, Zepbound, by compounding pharmacies. These developments underscore Eli Lilly’s active role in the pharmaceutical industry and its ongoing efforts to expand its market presence.

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