Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Thursday, Truist Securities updated its financial model for pharmaceutical company Eli Lilly (NYSE:LLY), resulting in an increased price target for the company's shares. The target was raised to $1,033.00 from the previous $1,000.00, while the firm maintained a Buy rating on the stock.
The adjustment comes after a review of Eli Lilly's in-process research and development (IPR&D) expenses, as reported by the company. Truist Securities has taken into account Eli Lilly's continuous investments in manufacturing, specifically for the drug Zepbound. The firm's projections for Zepbound's market penetration and peak sales remain unchanged at approximately $30 billion.
The revised model by Truist Securities now forecasts Eli Lilly's revenues to be $46.0 billion for 2024, increasing to $55.5 billion for 2025, and reaching $65.1 billion by 2026. These estimates are an uptick from the earlier projections of $46.0 billion for 2024, $53.9 billion for 2025, and $63.9 billion for 2026.
In terms of earnings per share (EPS), the updated figures from Truist Securities indicate an expectation of $12.97 for 2024, a significant rise to $22.67 for 2025, and further growth to $29.85 for 2026. This is a revision from the prior EPS estimates of $16.14 for 2024, $21.50 for 2025, and $28.95 for 2026. The adjustments reflect the firm's latest analysis and confidence in Eli Lilly's financial trajectory over the coming years.
In other recent news, Eli Lilly is facing a legal dispute with the U.S. Food and Drug Administration (FDA) and the Outsourcing Facilities Association over its weight loss and diabetes medication, tirzepatide. The FDA's decision to remove tirzepatide from its drug shortage list has sparked a lawsuit, as the association alleges that the drug is still in short supply. This development could influence the availability of compounded versions of the drug.
Eli Lilly has also been the recipient of multiple positive analyst ratings. TD Cowen maintained its Buy rating, highlighting the company's strong growth potential and impressive projected earnings growth. BMO Capital Markets and Truist Securities also reaffirmed their positive outlooks, following the FDA's clarification on tirzepatide's shortage status and a meeting with Eli Lilly's newly appointed CFO, respectively.
In addition to these developments, Eli Lilly is facing a lawsuit initiated by Texas Attorney General Ken Paxton. The suit alleges that Eli Lilly, along with other insulin manufacturers and pharmacy benefit managers, conspired to artificially inflate insulin prices.
InvestingPro Insights
Eli Lilly's strong market position and financial performance are further underscored by recent data from InvestingPro. The company's revenue growth of 31.87% over the last twelve months aligns with Truist Securities' optimistic revenue projections. This growth is particularly impressive given Eli Lilly's substantial market capitalization of $828.16 billion, highlighting its status as a major player in the pharmaceutical industry.
InvestingPro Tips indicate that Eli Lilly has maintained dividend payments for 54 consecutive years, demonstrating a commitment to shareholder returns that complements its growth strategy. The company's high return over the last year, with a one-year price total return of 59.83%, reflects market confidence in its pipeline and commercial products like Zepbound.
While the company trades at a high P/E ratio of 112.47, this valuation may be justified by the expected earnings growth, as evidenced by Truist Securities' increased EPS projections. Investors seeking more comprehensive analysis can access 17 additional InvestingPro Tips for Eli Lilly, offering deeper insights into the company's financial health and market position.
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