Eli Lilly's new weight-loss drug could generate more than $62 billion in 2030 sales, an analyst said Friday as he boosted his price target on Eli Lilly stock to 1,000.
That new price target from BofA Securities analyst Geoff Meacham is almost a third higher than Lilly stock's closing price target of 753.68 on Thursday. But Meacham says it's warranted given the competitive moat Eli Lilly and rival Novo Nordisk enjoy for their diabetes and obesity treatments.
Meacham's estimate only accounts for Lilly's tirzepatide, which sells as a diabetes drug called Mounjaro and as the obesity treatment Zepbound. Competitors are trying to catch up. But Lilly is already working on next-generation drugs. Including those brings his estimate up to $81 billion in 2030 sales.
"Admittedly, recent results from competitors look compelling," Meacham said in a report. But Lilly and Novo have "substantial expertise" in navigating relationships with payers and prescribers. Further, "We don't just expect manufacturing to remain an overhang for new entrants, but also generic entrants."
Eli Lilly stock jumped 3.8% to 782.12 on today's stock market. Novo stock also rose 3.7% to 124.23.
Eli Lilly Stock Benefits From A 'Moat'
Eli Lilly and Novo Nordisk lead the obesity treatment space. But even they are struggling with their own success. One reason is demand for these drugs has far outstripped supply. Still, by 2030, Meacham expects almost 7% of U.S. adults will be taking a drug in the GLP-1 agonist class for weight loss. That figure could boost Eli Lilly stock.
His estimate includes competitors. Big and small biotechs, alike, are working on rival weight-loss drugs.
Amgen recently said its early-stage obesity treatment led to durable weight loss after 150 days. This week, Viking Therapeutics said patients taking its obesity treatment lost 13.1% more weight over 13 weeks than placebo recipients. Viking stock rocketed 121%. The results outdo Lilly's Zepbound, which led to 7% to 8% weight loss over the same time period in a Phase 3 study.
But commercial dynamics favor Lilly and Novo, Meacham said.
"We still see substantial commercial moats that should shape market dynamics," he said. "Indeed, we suspect investors discount Lilly and Novo's substantial expertise in the space, which together with a lack of available manufacturing capacity, create very high competitive hurdles."
He reiterated his buy rating on Eli Lilly stock.
What's Beyond Weight-Loss Drugs?
Beyond its weight-loss drugs, Eli Lilly is also working on treatments in the neuroscience, oncology and inflammation and immunology spaces. Those are "additive" given the success Lilly has experienced in diabetes and obesity treatment. But they could still grow by a 16% compound annual rate over the next five years.
Eli Lilly stock has run up markedly in 2024. Shares have climbed 29% on a year-to-date basis and have a Relative Strength Rating of 95. This means Lilly stock ranks in the top 5% of all stocks when it comes to 12-month performance, according to IBD Digital. Novo stock has a slightly lower rating of 91.
In fact, Eli Lilly stock is currently in a profit-taking zone after breaking out of a flat base with a buy point at 629.97 in January, MarketSmith.com data shows.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
