Summary

  • Eli Lilly, a pharmaceutical firm, received a price target upgrade from broker BofA, based on promising prospects for its obesity treatment drug.
  • LLY’s stock price rose 2.3% following the price target increase, closing at US$565.22 on Friday.
  • Eli Lilly’s total revenue for Q2 2023 was US$8.31 billion, while net income was US$1.7 billion.

Broker BofA increased its price target on Eli Lilly and Company (NYSE: LLY), a pharmaceutical firm with its key areas of focus being neuroscience, cancer, and immunology. Eli Lilly’s market cap stood at over US$500 billion on Friday

LLY currently has a mean recommendation rating of 1.9 on five. Here, one indicates a ‘strong buy’ rating while five stands for a ‘strong sell' rating. Meanwhile, the consensus mean price target on LLY stands at US$584.9, an upside potential of over 3% over its closing price on Friday.

The price target upgrade led to LLY’s stock price rising by 2.3%. LLY closed at US$565.22 on October 6, 2023. At Friday’s close, LLY rose 4.38% intraday and by 54.5% on a YTD basis.

LLY Price Chart; Source: EODHD/Others

LLY achieved its 52-week high of US$601.84 on September 14, 2023. Since then, the stock has corrected itself by 6.08%.

BofA expects LLY price to rise to US$700

Brokerage BofA increased its price target on LLY from US$600 to US$700. This marks a potential increase of 23.8% over LLY’s closing price on Friday.

The price target upgrade came ahead of a key regulatory decision regarding the use of Eli Lilly’s drug Mounjaro. The medicine is expected to be a bestseller drug in the weight-loss treatment market.

Bank of America (BofA) indicated that there's a good chance that the company's therapies, tirzepatide for obesity and donanemab for Alzheimer's Disease, will obtain regulatory approvals. Additionally, the next-generation obesity drug retatrutide, along with the obesity medication orforglipron and tirzepatide, provide a variety of ways to administer treatment and put the company in a strong competitive position within the field of obesity treatment.

BofA also mentioned that opportunities beyond diabetes and obesity, such as sleep apnea, heart failure, NASH, and other conditions, continue to be significant factors that could drive positive outcomes for LLY.

LLY’s new Products added US$1 bn to revenue in Q2 2023

As per Eli Lilly’s latest financial reports, the company reported a revenue increase of 28% because of volume-driven growth from its drugs Mounjaro, Jardiance, Verzenio and Taltz.

The total revenue for Q2 2023 was US$8.31 billion, while net income was US$1.7 billion. The earnings per share for Q2 2023 were US$1.95.

Broker BofA stated that Eli’s drug orforglipron’s risk adjusted forecast stands at more than US$8 billion and for retatrutide, it is position at US$4 billion. Meanwhile, the broker expects the donanemab  to bring in revenues over US$5 billion.

Image Source: ©2023 Kalkine®; Data Source: Company Reports

Alongwith BofA, broker Crispidea also upped its price target on LLY to US$600 on October 5, 2023. Meanwhile, Crispidea also increased its rating on the stock to ‘buy’.

Cantor Fitzgerald maintained an ‘overweight’ rating on LLY, with a price target of US$600. However, Evercore ISI maintained an ‘in-line’ rating on LLY, after reviewing the stock on October 3, 2023.

EODHD/Others data suggests that of the 27 analysts that have covered the stock, 22 have given it either a ‘strong buy’ rating or a ‘buy’ rating. Meanwhile, four analysts suggest holding LLY and one analyst has given a ‘sell’ recommendation on LLY.