The best-performing US big cap biopharma company this year still has lots of room to grow, according to brokers.
Eli Lilly and Co (NYSE:LLY) “still offers one of the cleanest, de-risked growth stories” in the large cap pharmaceutical space, UBS analysts wrote in a note this week.
Its stock is up 18% so far this year on the strength of expectations for Mounjaro, a Type 2 diabetes treatment, and supported by positive data for its SURMOUNT-2 and TRAILBLAZER-ALZ2 trials.
Citing Eli Lilly’s “strong and sustainable growth profile,” UBS analysts have raised its 12-month price target on the stock from US$447 to US$498.
Analysts are modeling 16% and 29% top and bottom line five-year growth compound annual growth rates, respectively.
Longer-term, UBS sees Eli Lilly stock hitting nearly $30 in earnings per share (EPS) by 2027.
“Our Buy rating on Eli Lilly is based on the view that Mounjaro's (tirzepatide) potential is currently underappreciated with significant upside potential to near-mid term numbers,” analysts wrote.
“This view is underpinned by the robust SURMOUNT-1+2 data (body weight reduction of >20% in obesity and ~16% in T2D), positive KOL feedback and early physician survey data. We expect tirzepatide to be granted a rapid approval in obesity, which should catalyze estimate increases.”
The note also touched on Eli Lilly’s pipeline beyond Mounjaro, including late-stage Alzheimer's asset donanemab and promising next- generation obesity/T2D assets such as retatrutide.
Eli Lilly’s shares were trading around US$426 on Wednesday afternoon in New York.
Contact Angela at angela@proactiveinvestors.com
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