On Friday, UBS has increased the price target for Eli Lilly shares on the New York Stock Exchange (NYSE:LLY) to $1,100 from the previous $910, while maintaining a Buy rating. The firm has recognized the stock's strong momentum, attributing it to robust demand for incretins and an improvement in supply, noting that the FDA has recently lifted shortages for the 5mg and 12.5mg dosages.
Eli Lilly's second quarter of 2024 performance is projected to be slightly below the consensus revenue, with UBS estimating $9.8 billion against a consensus of $10.0 billion. This is mainly due to the anticipated lower sales of Trulicity, which UBS believes is currently mismodeled.
For Zepbound, another focus product, UBS forecasts sales of $850 million, which is slightly below the consensus estimate of $881 million. The pricing strategy is pivotal for Eli Lilly, and while UBS anticipates it to remain consistent with the first quarter, they acknowledge the uncertainty due to the recent shortages and stocking dynamics that could affect the net price.
Despite experiencing shortages, Mounjaro is expected to continue its strong performance with a forecast of $2.3 billion in sales, which is just shy of the consensus estimate of $2.4 billion. The medication is benefiting from a pricing tailwind, with the estimated price per treatment rising to $450 in the second quarter from $410 in the first quarter of 2024.
At the earnings per share (EPS) level, UBS estimates that Eli Lilly will report $2.76 for the quarter, which is 1% below the consensus estimate of $2.79. The firm's analysis suggests cautious optimism, with potential for the actual figures to exceed or fall short of expectations based on the key pricing strategies and market dynamics.
In other recent news, Novo Nordisk (NYSE:NVO) is under scrutiny from US Senator Bernie Sanders, who is optimistic about persuading the pharmaceutical giant to lower the prices of its weight loss medications Ozempic and Wegovy in the United States.
Sanders' confidence stems from previous success in pressuring drug companies to reduce their prices. He is advocating for the U.S. price of Ozempic to be adjusted to around $155, mirroring its cost in Canada.
On another front, Novo Nordisk has secured approval for its weight-loss medication, Wegovy, in China, marking a significant move in the global market. This development comes amidst a tight timeline due to the impending expiration of its patent on semaglutide, the active ingredient in Wegovy, in less than two years.
Meanwhile, Eli Lilly is set to acquire Morphic Holding (NASDAQ:MORF), a developer of a promising drug for inflammatory bowel disease, in a transaction valued at $3.2 billion. This strategic move grants the pharmaceutical giant access to Morphic's lead drug, MORF-057, which is currently being tested in multiple phase 2 studies for the treatment of ulcerative colitis and Crohn's disease.
In analyst notes, BMO Capital maintained a positive stance on Eli Lilly with an Outperform rating, buoyed by the anticipated approval of donanemab, branded as Kisunla. The new drug is poised to diversify Eli Lilly's revenue streams, potentially adding up to $7.1 billion at peak sales. Barclays (LON:BARC) has also maintained its Overweight rating on Eli Lilly's stock, following the Advisory Committee's review of Eli Lilly's Alzheimer's drug, donanemab.
InvestingPro Insights
Eli Lilly and Company (NYSE:NYSE:LLY) has been a topic of robust discussion among investors, and recent data from InvestingPro provides additional context to the narrative. With a staggering market capitalization of $853.39 billion, Eli Lilly showcases its significant presence in the pharmaceutical industry. The company's P/E ratio stands at a high 138.8, reflecting investor confidence and a premium valuation for its growth prospects. This high valuation is supported by a notable revenue growth of 29.76% over the last twelve months as of Q1 2024, indicating strong business performance.
InvestingPro Tips highlight Eli Lilly's consistent shareholder value, with a dividend that has been raised for 9 consecutive years, and a robust dividend history maintained for 54 consecutive years. Moreover, the stock's low price volatility suggests a stable investment opportunity for those looking to avoid significant market fluctuations. With these insights, investors may find additional value in the company's stock, especially considering the strong return of 113.6% over the past year, signaling impressive momentum.
For those seeking a deeper analysis, InvestingPro offers several more tips on Eli Lilly, which can be accessed by visiting: https://www.investing.com/pro/LLY. To enhance your investment research, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing a comprehensive toolset for informed decision-making.
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