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Eli Lilly and Company (LLY), headquartered in Indianapolis, Indiana, is renowned as one of the largest pharmaceutical companies with a diversified product profile. Valued at $790.51 billion by market cap, the company discovers, develops, and markets human pharmaceuticals worldwide by harnessing the power of biotechnology, chemistry, and genetic medicine, helping address diseases like diabetes, cancer, obesity, and Alzheimer’s.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” LLY fits that description, reflecting its substantial size, stability, and influence in the pharma industry. LLY is the highest-ranked pharmaceutical company by market cap in the S&P 500 Index ($SPX).
However, the pharmaceutical giant has fallen marginally from its 52-week high of $838.45, which it hit on Jun. 5. Shares of LLY are up 7.1% over the past three months, outperforming the US Healthcare iShares ETF’s (IYH) 0.4% gains over the same time frame.
Longer term, LLY shares rose 88.5% over the past year, and in 2024, the stock is up 43.2%. By contrast, the IYH is up 6.7% on a YTD basis and 10.7% over the past 52 weeks.
To confirm the bullish price trend, LLY has been trading above its 50-day moving average since mid-May and above its 200-day moving average since late March 2023.
On Apr. 30, LLY shares rose more than 7% after reporting its Q1 results and raising its full-year revenue estimate to between $42.40 billion and $43.60 billion, up from the previous forecast of between $40.40 billion and $41.60 billion. The company also expects its full-year EPS to come between $13.50 and $14, higher than the previous guidance of between $12.20 and $12.70. The pharmaceutical giant reported an adjusted EPS of $2.58, beating analysts’ estimates of $2.46. However, its revenue rose 26% year over year to $8.77 billion, missing the consensus estimate of $8.92 billion.
On May 6, LLY shares rose by 4% after the company announced a dividend of $1.30 per share to be paid on Jun. 10.
LLY's overall outperformance can be attributed to the soaring demand for Mounjaro and Zepbound. The market size of Zepbound, a weight-loss drug, and Mounjaro, a diabetes treatment, is enormous. J.P. Morgan's research states that 9% of the U.S. population could use a GLP-1 medication by 2030.
To emphasize the stock’s overall outperformance, top rival Bristol-Myers Squibb Company (BMY) has underperformed – not just LLY but also the broader sector. BMY stock has declined 36.9% in the past 52 weeks and 19.5% on a YTD basis.
With its recent outperformance compared to the sector, analysts remain optimistic about LLY’s prospects. The stock has a consensus rating of “Strong Buy” from the 21 analysts covering it, but the mean price target of $812.04 is a 2.4% discount to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
