Eli Lilly (NYSE:LLY) stock has been trading near its all-time highs, just 5% shy of its August 2024 peak. With shares up nearly 68% over the past 52 weeks and 58.5% year-to-date, Eli Lilly has outperformed the broader market significantly. As the pharmaceutical giant’s market cap approaches $1 trillion, investors are questioning whether Eli Lilly stock remains a buy at these elevated levels. This Eli Lilly stock forecast breaks down the company’s performance and future outlook to help investors make informed decisions.
Eli Lilly’s Impressive Financial Performance
Eli Lilly’s success in recent years can largely be attributed to its blockbuster GLP-1 drugs, Mounjaro and Zepbound, which have become game-changers in the treatment of diabetes and obesity. These drugs contributed to a 36% year-over-year (YoY) revenue increase in Q2 2024, pushing quarterly revenues to $11.3 billion. Excluding the sale of Baqsimi rights in 2023, revenue growth was even more impressive at 46%.
Earnings per share (EPS) for Q2 2024 came in at $3.92, surpassing analyst expectations by a remarkable 48%. The company has also raised its full-year guidance, projecting revenues between $45.4 billion and $46.6 billion, with EPS between $16.10 and $16.60.
With its solid financial foundation, Eli Lilly is valued at 40.7x estimated 2025 earnings—higher than the healthcare sector average. However, the company’s forecasted earnings growth of 160% this year and 45% in fiscal 2025 justifies this premium. Furthermore, Eli Lilly’s consistent dividend payouts, including a recent $1.30 per share dividend, offer a stable income stream for investors, even if the current yield of 0.57% is modest compared to other dividend stocks.
Key Catalysts Driving Eli Lilly’s Growth
Beyond its GLP-1 offerings, Eli Lilly has made major strides in other areas. The company recently gained FDA approval for two key drugs: Ebglyss for eczema and Kisunla for Alzheimer’s disease. The latter has already started clinical use, representing a significant breakthrough in treating a disease with limited options.
Additionally, Eli Lilly is investing heavily in expanding its manufacturing capabilities. The company announced a $1.8 billion factory expansion in Ireland to ramp up production of its most in-demand drugs. Another $800 million will be spent on a separate facility, part of a broader $20 billion initiative to scale up manufacturing operations since 2020. These efforts will help Eli Lilly meet the rising demand for its diabetes and obesity treatments while securing its supply chain for the future.
Eli Lilly is also pursuing innovative collaborations. Notably, the company is working with OpenAI to leverage artificial intelligence for discovering new treatments to combat antibiotic-resistant bacteria. This collaboration could yield transformative solutions in addressing one of the most pressing healthcare challenges today.
Analyst Opinions and Stock Forecast for Eli Lilly
Analysts remain bullish on Eli Lilly stock. Out of 23 analysts covering the company, 20 have issued a “Strong Buy” rating, while one recommends a “Moderate Buy,” and two rate the stock as a “Hold.” None of the analysts suggest selling the stock, which reflects confidence in Eli Lilly’s long-term growth prospects.
The average 12-month price target for Eli Lilly is $1,003, which implies an 8.4% upside from current levels. Some analysts, like BMO Capital’s Evan Seigerman, have raised their price targets even higher. Seigerman’s new price target of $1,101 highlights the company’s exceptional earnings growth and strategic execution, particularly in manufacturing.
Conclusion: Is Eli Lilly Stock Still a Buy?
Eli Lilly’s combination of strong financial performance, breakthrough drug approvals, and strategic expansion makes it an appealing investment, even as it trades near record highs. The company’s blockbuster GLP-1 drugs, alongside its investments in Alzheimer’s and eczema treatments, suggest a robust pipeline of future growth drivers.
While Eli Lilly stock is priced at a premium compared to industry peers, the company’s projected earnings growth more than justifies this valuation. Moreover, its focus on returning value to shareholders through dividends and expansion into new markets reinforces the case for holding Eli Lilly stock in a diversified portfolio.
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