Opinions
Christine Poole
Eli Lilly & Co.
LLY-N
RISKY
Jun 13, 2024
Stock price when the opinion was issued
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Plethora of ideas. Part of the story on cancer. Weight-loss drug is in the lead, and a pill instead of injection is the ultimate goal. Earnings from weight loss will double in 3 years, and then they still have all the other drugs in the pipeline. Yield is 0.70%.
(Analysts’ price target is $996.37)The more successful of the GLP-1 stocks compared to NVO. Decent entry point. Trades in the 30s on forward PE, so there's a strong expectation of prescription growth; every reason to believe that's going to happen.
Be cautious on position size; don't be aggressive. Stock was down 10% yesterday because NVO made a deal with CVS to become its prime recommended product for obesity. So NVO is starting to compete more on price.
Premium contentThis big pharma company has a host of weight loss GLP-1 medications that it will soon release progress reports on later this month, some of which have already received approvals to develop. It trades at 27x forward earnings and supports a 77% ROE. We recommend setting a stop-loss at $703, looking to achieve $987 -- upside potential over 20%. Yield 0.7%
(Analysts’ price target is $987.22)
Has done very well on weight loss, plus favourable news on Alzheimer's drug. Hard to buy, especially as a value investor, as it keeps going higher. Trades over 60x PE. Lots of momentum. Expectations very high. History has shown that it's really hard for companies to sustain really strong growth rates for consecutive years and to continuously ramp up margins. Competition always comes in.
She's not a technical fund manager, but if there's a big pullback, you could use technicals to look for an entry point. Have to consider your investment horizon.