Eli Lilly & Co. (NYSE: LLY), recently saw its market value plummet by $123 billion. The dramatic drop in market value follows the positive announcements made by competitors such as Viking Therapeutics Inc. and Roche Holding AG regarding their weight-loss drugs. According to JPMorgan’s Chris Schott this decline may be a great opportunity for investors to buy Eli Lilly shares at substantial discounts.
Schott is confident that Eli Lilly will continue to dominate the market for obesity treatments despite the increasing competition. JPMorgan maintains an “overweight rating” on Eli Lilly, and has set a $1,000 price target for the stock. This would indicate a 25% potential upside over its current level.
Eli Lilly will report Q2 earnings by August 8, 2018.
Eli Lilly & Co’s bullish outlook for its shares comes just a week ahead of the company reporting financial results.
The consensus is that the New York-listed firm will earn about $2.75 per share, on a revenue of around $10 billion. This compares to $1.98 a share, and $8.31billion, respectively, for the same quarter in last year.
Christ Schott anticipates that supply chain issues related to Trulicity will offset the strength of Mounjaro (a diabetes and weight-loss drug).
In the long term, he is convinced, though, that Mounjaro’s and Zepbound’s sales will double from $16.5 Billion in 2024 to $36.5 Billion in 2026.
Eli Lilly’s stock pays out a current dividend yield of 0.64 %, making it attractive to income investors.
UBS analysts bullish on Eli Lilly Stock
The analyst at JPMorgan named LLY as a top choice in the pharma space Monday, citing its “clear potential for upside to long-term estimates”.
Eli Lilly is a good investment, as the new product launches and growth of its core products will offset any inflation reduction act (IRA) issues.
The drugmaker has gained close to 40% in the past year, despite the recent drop. According to the investment firm a part of this ongoing weakness may be due to investors taking profits after that amazing rally. This is similar to what’s happening in megacap tech shares.
Trung Huynh, of UBS, also predicts that Eli Lilly’s GLP-1 competitors will have a market share below 10% in the next five-year period.
UBS expects that the market for weight-loss drugs will grow by a 33% compound annualised growth rate and reach $150 billion sales in 2029, up from its earlier estimate of $125 billion.
The post Eli Lilly’s market value drops by $123 billion: Strategic buying opportunity? This post may change as new information unfolds
