Deutsche Bank upgraded Eli Lilly and Co (LLY.US) from "hold" to "buy", raising the target price from $725 to $1025.
Deutsche Bank has upgraded Eli Lilly and Co (LLY.US) from "hold" to "buy" with a target price of $1025, calling the pharmaceutical company a "high-growth unicorn".
Eli Lilly and Co has announced better-than-expected results for the second quarter. Due to the continued hot demand for weight loss drugs, the company raised its guidance for the year, exceeding market expectations. Eli Lilly said that in addition to GLP-1 agonists Mounjaro and Zepbound (used in diabetes and weight loss treatment), revenue growth was also driven by breast cancer drug Verzenio.
James Shin, an analyst at Deutsche Bank, said that the better-than-expected performance "helps alleviate some of the tension in the turbulent macro environment," and that the stock is expected to perform well due to its "high-growth prospects and low beta coefficient".
Sales of Mounjaro outside the United States will be an important revenue driver. According to Bloomberg, this heavyweight drug has generated sales of $3.1 billion, double the same period last year, easily surpassing the market's expected $2.4 billion. The company's recently launched similar drug Zepbound brought in $1.2 billion in revenue, while the market generally expected $0.8189 billion.
Shin said that in addition to Novo Nordisk (NVO.US), Eli Lilly's competitors include Zealand, Viking Therapeutics (VKTX.US), Soricimed Biopharma (GPCR.US), and Roche (RHHBY.US), among which Roche's oral weight loss drug is seen as the biggest commercial threat.
In addition, Morgan Stanley listed Eli Lilly as the top pick, saying the company has "the strongest growth prospects" in its coverage.
Overall, Wall Street analysts give Eli Lilly a "strong buy" rating with an average target price of $1000.69, 13% higher than the current level.