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Indianapolis, Indiana-based Eli Lilly and Company (LLY) is a leading pharmaceutical company that sells Trulicity, Verzenio and Taltz drugs. The company discovers, develops, and markets human pharmaceuticals. With a market cap of $755 billion, LLY’s products include neuroscience, endocrine, anti-infectives, cardiovascular agents, oncology, and animal health products.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and LLY definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the general drug manufacturers industry. LLY being one of the world's largest pharmaceutical companies, boasts a diversified product profile including a solid lineup of new successful drugs.
Despite its notable strength, Eli Lilly slipped 17.8% from its 52-week high of $972.53, achieved on Aug. 22. Over the past three months, LLY stock declined 16.7%, significantly underperforming the S&P 500 Index’s ($SPX) 7.1% gains during the same time frame.
In the longer term, shares of Eli Lilly rose 37.2% on a YTD basis and climbed 36.9% over the past 52 weeks, outperforming SPX’s YTD gains of 26.8% and 31.6% returns over the last year.
However, LLY has traded below its 50-day moving average since mid-October. It has mostly traded below its 200-day moving average since early November.
Eli Lilly's success is driven by its strong presence in diabetes and obesity, with blockbuster potential in its Alzheimer's treatment Kisunla. The company's expanding portfolio and promising pipeline, including Mounjaro and Zepbound, are key drivers of growth. With the FDA approval for Ebglyss in dermatology and upcoming launches in diabetes and weight loss, Eli Lilly's future looks bright. The company's revenue growth is supported by strong sales of Mounjaro and Zepbound, and its innovative pipeline further solidifies its long-term growth prospects.
On Oct. 30, LLY shares closed down more than 6% after reporting its Q3 results. Its revenue of $11.4 billion missed the consensus estimates of $12.1 billion. The company’s adjusted EPS was $1.18, well below the analyst estimate of $1.47.
Eli Lilly’s rival, Johnson & Johnson (JNJ) shares lagged behind the stock, with a 1.2% dip on a YTD basis and a 2.3% loss over the past 52 weeks.
Wall Street analysts are bullish on LLY’s prospects. The stock has a consensus “Strong Buy” rating from the 25 analysts covering it, and the mean price target of $1015.58 suggests a potential upside of 27% from current price levels.
