Opinions
Michael Hakes - CFA, MBA
Eli Lilly & Co.
LLY-N
PARTIAL SELL
Aug 02, 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)
News just keeps getting better and better as to how obesity drugs can help other medical conditions. Cautious on it now, selling down as the position increased in the portfolio. Overhang is competitors coming in over next 3-5 years, and the dominant position today may not be so dominant.