Eli Lilly (LLY) Bulls Eye $1,000 Stock Price Target as GLP-1 Alpha Bandwagon Rolls On

Business Insider

a day ago

Eli Lilly & Co. (LLY) has emerged as one of the most compelling opportunities in the market today. The company is entering the prime of its new chapter, focused on leading the way in weight loss and diabetes treatments. I recently sold my Novo Nordisk (NVO) shares—not because I doubt Novo's science, but because I believe Lilly boasts stronger management, superior operational execution, and greater upside potential over the next one to three years. My 12-month price target for Lilly is $1,100.
Confident Investing Starts Here:
GLP-1 Leadership with Clinical Momentum
Lilly's recent breakthrough has been nothing short of transformational. Its dual GLP-1 therapy, tirzepatide—marketed as Mounjaro for diabetes and Zepbound for obesity—is dominating the market, generating $3.84 billion and $2.31 billion in Q1 FY2025 revenues, respectively. Even more impressive, tirzepatide has shown superior weight loss results compared to Novo Nordisk's semaglutide (Ozempic, Wegovy), with Zepbound users achieving around 20% weight loss versus roughly 14% in Wegovy studies. The data is clear, and momentum is firmly on Lilly's side.
Adding to my confidence is the strength of Lilly's product pipeline. Orforglipron, an oral GLP-1 candidate, recently delivered compelling Phase 3 results as the first oral, non-peptide GLP-1 agonist to match the efficacy of injectable therapies—potentially revolutionizing the patient experience in weight-loss treatment.
Meanwhile, retatrutide, a triple-agonist targeting GLP-1, GIP, and glucagon receptors, achieved a remarkable 24% weight loss in early obesity trials and is advancing rapidly through Phase 3. If these next-generation drugs succeed, they could unlock hundreds of billions in new market value.
Management & Manufacturing Excellence Compound Returns
Great companies aren't built on strong drugs alone—they're built on strong management. What stands out most about Eli Lilly isn't just its innovative pipeline but the exceptional execution behind it. CEO David Ricks and his team have shown remarkable conviction in targeting diabetes and obesity as key growth drivers, backing that vision with massive investment.
Since 2020, Lilly has poured over $50 billion into expanding U.S. manufacturing mega-sites capable of producing injectables and oral medications at scale. This is not only a bet on growth but a strategic move to reduce future risks. With Novo Nordisk facing supply constraints, Lilly's vertical integration of manufacturing infrastructure is a smart play to avoid similar pitfalls. That kind of foresight is exactly what I want managing my investments.
Lilly's performance backs this up— Q1 Fiscal 2025 showed gross margins at a stellar 83.5%, up year-over-year. While R&D spending grew, it didn't outpace revenue, creating operating leverage. Selling and administrative costs rose 26%, but top-line revenue jumped 45%, signaling intelligent growth. With a forward P/E near 35 and a sales multiple around 11, Lilly isn't cheap, but it doesn't need to be. Earnings are projected to surge nearly 40% in Fiscal 2026, justifying the valuation. In my view, the market still undervalues Lilly's resilience and staying power.
Technical Positioning & Price Outlook
After peaking near $955 last year, Lilly shares have pulled back to around $720. On May 14, the stock's relative strength index hit 35, signaling strong value by most technical measures. For retail investors like me, that's a clear opportunity alert. While the stock remains below both its 50-day and 200-day moving averages after a 'Death Cross' indicating short-term bearish momentum, I consider that noise irrelevant for medium- to long-term investors.
I view this as a rare chance to buy into a powerhouse at a discount. Given the current earnings growth trajectory, I believe shares will not only revisit but likely surpass their all-time highs soon. My 12-month price target of $1,100 implies roughly 50% upside. Fundamentally, the market is still coming to grips with the massive potential of the GLP-1 market, and I see few obstacles standing in the way of sustained growth.
Is Eli Lilly a Buy, Sell, or Hold?
On Wall Street, Eli Lilly has a consensus Strong Buy rating with 16 Buys, one Hold, and one Sell rating. LLY's average stock price target is $1,003.14, indicating almost 40% upside potential in the next 12 months. That's slightly below my own more bullish estimate, but still remarkable nonetheless.
Healthcare Powerhouse Poised for Long-Term Growth
Eli Lilly is a completely different company than it was just two or three years ago—now an innovation-driven, operationally disciplined giant leading the biggest secular growth story in healthcare. This isn't a quick trade for me; it's a long-term hold as Lilly scales its GLP-1 pipeline with promising new launches like orforglipron and retatrutide.
With management's vision, strong clinical execution, disciplined approach, and significant valuation upside, LLY stands out as one of the most compelling stocks on the market. I've confidently taken my position and am ready to hold steady through the next few years of growth.