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Yahoo
7 hours ago
- Business
- Yahoo
Should You Invest $1,000 in Eli Lilly today?
Eli Lilly is a pharma player, but it offers the growth of a tech stock thanks to its weight loss drugs portfolio. The weight loss market could represent a multibillion-dollar opportunity well into the next decade. 10 stocks we like better than Eli Lilly › Eli Lilly (NYSE: LLY) sells a broad range of medicines, from cancer and immunology drugs to treatments for migraine. The pharma giant's presence across several treatment areas has helped it grow earnings over time. But, in recent years, one particular product portfolio has stood out and driven double-digit revenue growth: drugs to help people lose weight. Right now, Lilly sells tirzepatide, commercialized as Mounjaro for type 2 diabetes and as Zepbound for weight loss, though doctors have prescribed either one for patients hoping to shed pounds. Mounjaro and Zepbound each have become blockbusters, bringing in billion-dollar revenue annually. Lilly dominates the weight loss market along with rival Novo Nordisk, but a recent move by Lilly could help it push farther ahead in the coming years. Considering this, should you invest $1,000 in Lilly stock today? Let's find out. So, first, let's talk about Lilly's path so far in this market and what might lie ahead. Lilly's weight loss drugs are part of a class known as dual GIP and GLP-1 receptor agonists. They act on hormonal pathways involved in the digestion process and help control blood sugar levels and appetite. Novo Nordisk's rival drug, semaglutide -- sold as Ozempic for type 2 diabetes and Wegovy for weight loss -- targets only GLP-1 but works in a similar way. Novo Nordisk was first to market with its product, winning approval for Ozempic in 2017, and this offered it time to build a market-leading position. But demand has been so high for such weight loss drugs that Lilly quickly gained share soon after entering the market with Mounjaro in 2022 and then with Zepbound in 2023. In fact, demand has been so strong that these drugs held spots on the U.S. Food and Drug Administration's drug shortage list for quite some time, only exiting the list in recent months. A better supply situation for weight loss drugs isn't due to a drop in demand but instead to increases in manufacturing capacity by both companies. So solid demand for these products still exists -- and is likely to grow. It's important to keep in mind, though, that both Lilly and rivals may face some headwinds in the years to come, and that's why Goldman Sachs Research recently reduced its forecast for global sales of anti-obesity medicines to $95 billion by 2030, from an earlier forecast of $130 billion. This is due to several potential challenges, including lower per-unit prices and weaker reimbursement from certain insurers. But even considering the challenges, "we see a significant growth opportunity for both existing players as well as new entrants into this market," said Goldman analyst Asad Haider. After all, from today's $28 billion market, the forecast figure represents a 239% increase. A look at Lilly's weight loss drug sales shows us this company has the momentum to benefit from this high-growth market. Last year, Mounjaro and Zepbound generated more than $11 billion and $4.9 billion in sales, respectively. And these two products are driving double-digit total sales growth at Lilly -- with a 32% gain in the full year and a 45% gain in the most recent quarter. Now, what may push Lilly past Novo Nordisk -- and keep it far ahead of newer rivals down the road -- is the company's progress on an oral weight loss candidate. Current products are in injectable form, which may be less convenient and even uncomfortable for certain users. Lilly recently reported positive results from a phase 3 trial of its oral candidate, orforglipron, and plans to request approval for use in weight management by the end of the year. Though Novo Nordisk sells an oral form of semaglutide, it involves strict food and water guidelines. The potential Lilly product doesn't, offering it a significant advantage. Now, let's return to our question: Should you invest $1,000 in Lilly right now? The shares are trading for 34 times forward earnings estimates -- that's around the same level as top tech companies such as Amazon and Nvidia, also known for delivering double-digit revenue growth. In fact, since the launch of tirzepatide, Lilly has traded at valuations resembling those of growth stocks. So it may seem pricey to you for a pharmaceutical player. But it's worth keeping in mind that Lilly stands out from the pharma crowd due to its presence in the high-growth market of weight loss drugs, yet at the same time it offers you the stability and dividend growth of a pharma stock. You generally can count on big pharma companies for steady revenue since patients always need their medicines -- regardless of the economic situation. And you can count on Lilly for passive income too, with a forward dividend of $6, representing a dividend yield of 0.8%. Meanwhile, valuation has come down from its peak to levels that look very acceptable for a growth stock. All of this means that, by investing in Lilly, you're getting growth worthy of a tech company along with the safety generally associated with a pharma stock. That makes the stock well worth the price, and a great place to park $1,000 right now. 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The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, and Nvidia. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. Should You Invest $1,000 in Eli Lilly today? was originally published by The Motley Fool Sign in to access your portfolio
Bloomberg
29-04-2025
- Business
- Bloomberg
Job Openings, Consumer Confidence Drop
"Bloomberg Markets" follows the market moves across every global asset class and discusses the biggest issues for Wall Street. Today's guests; Invesco Global Market Strategist Brian Levitt, Goldman Sachs Healthcare Analyst Asad Haider, and Bloomberg's David Gura. (Source: Bloomberg)
Yahoo
15-04-2025
- Business
- Yahoo
J&J beat on earnings, but tariffs still pressure pharma sector
Johnson & Johnson (JNJ) reported stronger-than-expected earnings. Goldman Sachs Global Investment Research head of the healthcare business unit Asad Haider joins Catalysts with Madison Mills and StoneX senior adviser Jon Hilsenrath to take a closer look at the earnings print and Johnson & Johnson's position as US President Trump pushes for tariffs on pharmaceutical imports. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Johnson & Johnson topped the street's expectations in its latest quarter, thanks to strong cancer drug sales during the 3-month period. The company boosted its full-year sales outlook, but tempered expectations for its adjusted operational profit, citing the impact of a recent acquisition and, of course, tariffs. President Trump has warned that levies will be placed on the sector very soon. Joining us now to discuss is Saad Hater, Goldman Sachs Global Investment Research Head of the Healthcare Business Unit. Saad, great to speak with you. Let's start on Johnson & Johnson maintaining the EPS outlook. How were they able to do that in your view and what are your other big takeaways? Yeah, thanks for having me. Um so, there there were some questions. I mean, overall, we thought that the quarter was actually very encouraging and very much in line with the thesis uh that we have on Johnson & Johnson. And just to zoom out for a second, we upgraded the stock to buy last week, uh based on our view that the innovative medicine business is going to continue to surprise on the upside and show encouraging trends. And that's really what you saw. Now, there was some gross margin related pressure, um which they cited, uh they attributed to Part D dynamics. This is the first quarter that the pharma industry is going to see uh some headwinds from the inflation reduction act, uh particularly related to Part D. Uh and there were also some tariff related costs that they that they talked about, um about $400 million that they attributed to the MedTech business. But beneath the hood, uh the pharma business did really well and their operating margins actually beat because they flex the P&L by cutting costs and cutting R&D. And to us, that was actually a very encouraging sign. And I think the combination of those things, along with a little bit of an FX tailwind, had them maintain uh the earnings for the year. And how are you thinking about the impact of tariffs, both on on Johnson & Johnson, and then just moving forward? Because they are the first pharma name to report, what does the what what did their results tell you about how the rest of the industry might be impacted by tariffs as well? Well, the short answer is not much. And I think uh it's still all very uncertain. I think uh we all have been waiting to see what the announcement for tariffs is. I think what's known, of course, is that uh the the pharmaceutical industry is going to have be tariffed, the way semiconductors and autos and several other industries are. Uh we've been waiting for this for a while. What we also know is that there has already been a section 232 investigation that has begun. Uh and uh depending on how that goes, uh what we're all going to be waiting for is to see what level of tariffs are going to be applied to the industry. And uh at this point, I just don't think we have a lot of clarity on any of that. And so, what that's been doing is creating a lot of uncertainty across the entire pharmaceutical sector. It's making people question the traditional orthodoxy around the margin structure and the profitability of this sector. But we just don't know a lot right now, and I think it would be too early for me to speculate on where this all lands. Uh but this is a cloud that the sector that it's an overhang on the sector. And until we get a real off-ramp, uh it's going to be hard to see how that uh um you know, how that overhang goes away. And Saad, my guest host, John Hilsenrath, is still with me. John, you got a question for Saad? Saad, you you talk about J&J flexing their earnings muscle by cutting costs and cutting R&D. Uh I'm listening to hear how all of this affects the economy, and that sounds like bad news to me. Well, I don't think it's I don't think it's bad news necessarily. I mean, I think we don't we don't really know uh line items on what exactly they did on the SG&A and the R&D side. I think it just speaks a little bit to the leverage that they have across the P&L to uh you know, make these types of investments. I think what's more interesting is just the way that Johnson & Johnson is has been responding, as I expect others to to to these tariff threats, which is uh building uh infrastructure, manufacturing facilities in the US. I think everyone saw that uh about 3 weeks ago, they announced a $55 billion manufacturing commitment to the US that is higher, that's about 25% higher than what they had initially said they'd do. Uh they opened a new facility in North Carolina, which they are going to use to manufacture in the US. And there's three other facilities that they're going to bring on the manufacturing side that are yet to come. So, I think those types of measures are probably more important for, as far as the overall economy goes, than them, these pharma companies, really flexing the the the the P&L in there with with things like SG&A and and R&D. Yeah, Saad, I'm also curious how you're thinking about the impact of China and any China demand on this. John, I wonder if you have a question to that end as well. Well, I I mean, I'm I'm interested in in China, and I'm also interested in, you know, the risk that that they cut off supply chains and that that affects the supply chain of the pharma industry. I mean, John, I just don't think we know. I just think it's just too early to speculate how this all plays out. Um like I said, uh there are we are right now navigating navigating a period in the pharmaceutical sector where there are just a lot more questions than there are answers. I think it would be too premature for me to speculate uh on, you know, where uh what gets tariffed, what happens with China, what happens with demand. Um but our focus is just on fundamentals, and our call on J&J really has to do with the fact that their pharma business and some of the new product cycles within their pharma business are actually underappreciated, based on some of the diligence that we've done. And once this blows through, I mean, that's really where we'd be guiding investors. Sign in to access your portfolio
Globe and Mail
14-04-2025
- Business
- Globe and Mail
Johnson & Johnson (JNJ) Is About to Report Its Q1 Earnings Tomorrow. Here Is What to Expect
Healthcare giant Johnson & Johnson (JNJ) is gearing up to release its first-quarter 2025 financials on April 15. JNJ stock has gained over 5% year-to-date, mainly due to solid financials, a sales boost from its recent Intra-Cellular Therapies acquisition, and steady investor returns through consistent dividend payouts. Wall Street analysts expect the company to report earnings of $2.58 per share, representing a 4.8% decrease year-over-year. Stay Ahead of the Market: Discover outperforming stocks and invest smarter with Top Smart Score Stocks. Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener. Meanwhile, revenues are expected to increase by about 1% from the year-ago quarter to $21.56 billion, according to data from the TipRanks Forecast page. Analysts' Views Ahead of JNJ's Q1 Earnings Ahead of Johnson & Johnson's Q1 earnings, Bank of America Securities analyst Tim Anderson maintained his Hold rating on the stock and decreased the price target from $171 to $159 per share, citing concerns over new tariffs. For Q1, the firm retained its revenue forecast but expects earnings to decrease by 2% due to expected pressure on profit margins and higher costs. Looking ahead to 2025, BofA expects modest revenue growth from new products and recent acquisitions. However, he believes earnings may dip slightly due to currency headwinds and acquisition-related dilution. Meanwhile, Goldman Sachs analyst Asad Haider upgraded JNJ from Neutral to Buy and raised the price target to $172 from $157. He believes worries about the loss of patent protection for drugs like Stelara are overdone. According to him, JNJ's Innovative Medicine unit, which brings in most of the company's profits, should continue to perform well. Options Traders Anticipate a Minor Move Using TipRanks' Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don't worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a 4.04% move in either direction. Is Johnson & Johnson a Good Stock to Buy? Turning to Wall Street, Johnson & Johnson stock has a Moderate Buy consensus rating based on seven Buys and eight Holds assigned in the last three months. At $169.00, the average JNJ price target implies 11.38% upside potential. See more JNJ analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
Yahoo
08-04-2025
- Business
- Yahoo
Biopharma Shakeup: Goldman Boosts J&J, Eli Lilly While Flagging Risks at Pfizer and AbbVie
Goldman Sachs just made a series of big moves in U.S. biopharma coverage lifting ratings on Johnson & Johnson (NYSE:JNJ) and Eli Lilly (NYSE:LLY) while cutting Pfizer (NYSE:PFE), AbbVie (NYSE:ABBV), and Bristol Myers Squibb (NYSE:BMY) to Neutral. Warning! GuruFocus has detected 6 Warning Signs with PFE. Eli Lilly, which had seen a three-day decline, was upgraded to Buy by analyst Asad Haider. He said the company's strong position in the obesity drug market offers a compelling entry point. Still, Goldman slightly lowered its price target for the stock to $888 from $892. Johnson & Johnson also got a boost to Buy. Haider said concerns about losing patent protection on its blockbuster drug Stelara may be overstated. He pointed out that pharmaceutical valuations tend to bottom out about a year before major losses of exclusivity, which could work in J&J's favor. Goldman raised its 12-month price target to $172 from $157. On the flip side, AbbVie was downgraded to Neutral. Haider noted that investors already seem to have priced in the growth potential of its newer immunology drugs, Skyrizi and Rinvoq, following the Humira patent loss. The price target was cut to $194 from $212. Pfizer also moved down to Neutral, with its target reduced to $25 from $32. Goldman thinks the benefits of Pfizer's cost-cutting and COVID-related M&A efforts in oncology will take time to show up in its share price. Bristol Myers got the same treatment. Goldman said recent cost-cutting moves are already reflected in the stock, and its $67 target was cut to $55. The firm flagged looming patent cliffs and warned that bridging the expected revenue drop will be a significant challenge. This article first appeared on GuruFocus. Sign in to access your portfolio
