What Happened?
Shares of global pharmaceutical company Eli Lilly (NYSE: LLY) jumped 4.9% in the afternoon session after Leerink Partners upgraded the stock to Outperform from Market Perform and significantly raised its price target.
The analyst firm increased its price projection for the shares to $1,104 from a previous target of $886. The upgrade reflected an anticipation of multiple waves of adoption for obesity treatments. This growth was expected to be fueled by expanded Medicare and Medicaid access for these types of drugs by January 2027, signaling increased market confidence in the company's outlook.
After the initial pop the shares cooled down to $969.48, up 4.9% from previous close.
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What Is The Market Telling Us
Eli Lilly’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 3.1% on the news that the company reported a "beat and raise" quarter. Specifically, Eli Lilly blew past analysts’ revenue and EPS expectations, showing both better-than-expected growth and operating leverage thanks to Zepbound and Mounjaro sales. Looking ahead, its full-year revenue guidance was lifted and exceeded Wall Street’s estimates. Zooming out, we think this was a strong quarter with ample reasons for investors to remain positive.
Eli Lilly is up 24.6% since the beginning of the year, and at $969.48 per share, has set a new 52-week high. Investors who bought $1,000 worth of Eli Lilly’s shares 5 years ago would now be looking at an investment worth $6,615.
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