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Eli Lilly's Q1 Success with New Drugs Prompts Price Target Increase by Analyst

By Don Francis, Editor
May 15, 2024 7:09 AM UTC
Eli Lilly's Q1 Success with New Drugs Prompts Price Target Increase by Analyst

Argus Research's David Toung raised their price target on Eli Lilly & Co (NYSE: LLY) by 9.1% from $770 to $840 on 2024/05/14. The analyst maintained their Strong Buy rating on the stock.

Toung's price target hike was a direct response to Eli Lilly's first-quarter earnings report, which was released on May 6, 2024. The report highlighted the significant contribution of new products introduced in 2022 to the company's Q1 revenue growth. Specifically, Toung noted that the antidiabetic medicine Mounjaro and the obesity treatment Zepbound were the standout performers.

According to Toung, sales of Mounjaro increased from $569 million to $1.8 billion in Q1 2023, while Zepbound, which was recently launched, also showed promising growth. The analyst predicted that these drugs would continue to support Eli Lilly's expansion in the future.

Taking a closer look at Eli Lilly's Q1 2024 financials, the company reported earnings per share (EPS) of $2.58, surpassing the Zacks Consensus Estimate of $2.53 and representing a 59% increase compared to Q1 2023's $1.62. Revenue for the quarter amounted to $8.77 billion, slightly missing the Zacks Consensus Estimate of $8.81 billion but still surpassing Q1 2023's $6.96 billion by 26%.

Looking ahead, Eli Lilly's management provided guidance for the full year 2024, projecting an EPS range of $13.50 to $14.00 and revenue between $42.4 billion and $43.6 billion. Chairman & CEO David A. Ricks expressed optimism about the company's performance, attributing the solid revenue growth in Q1 to the strong sales of Mounjaro and Zepbound. Ricks also emphasized the company's commitment to addressing healthcare challenges and expanding manufacturing capacity.

In terms of analyst sentiment, 90% of top-rated analysts currently rate LLY as a Strong Buy or Buy, while 10% see it as a Hold. Notably, no analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts suggests that Eli Lilly's upcoming year will deliver earnings per share (EPS) of $9.96. If the analysts are correct, this would represent a 46% increase in yearly EPS on a year-over-year basis.

Examining the stock performance since Eli Lilly's latest quarterly report on May 6, 2024, the stock price has experienced a slight decline of 0.4%. However, on a year-over-year basis, the stock has surged by an impressive 75.8%. During this period, Eli Lilly has outperformed the S&P 500, which has seen a 26.8% increase.

Argus Research analyst David Toung, who issued the price target hike and maintained the Strong Buy rating, is ranked in the top 18% of Wall Street analysts by WallStreetZen. With an average return of 5.9% and a win rate of 63.6%, Toung specializes in the Healthcare sector.

Eli Lilly and Company, founded in 1876 and headquartered in Indianapolis, IN, offers a wide range of medicines for various health conditions, including cardiovascular conditions, diabetes, endocrinology, cancer, neurological problems, immune disorders, men's health, and musculoskeletal problems.

What is the price target for Eli Lilly & Co?

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