Opinions
Christine Poole
Eli Lilly & Co.
LLY-N
RISKY
Jun 13, 2024
Stock price when the opinion was issued
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He owns a small holding. Likes their growth profile from their weight-loss drug; they will continue to take market share from Novo Nordisk. The big news this week was that drug shortages were over. They lowered the price too. But shares are expensive at 20x PE on 2028 numbers--expensive for a pharmaceutical. It's had a big run, so he's not adding shares, but trimming.
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.
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.