On Wednesday, BMO Capital Markets sustained their positive stance on Eli Lilly (NYSE:LLY) stock maintaining an Outperform rating with a price target of $1,010. With a current market capitalization of $670 billion and impressive revenue growth of 27.4% over the last twelve months, the firm's analyst highlighted the robust demand in the incretin market as a key factor, despite the company's preliminary fourth quarter results for 2024 falling short of expectations.
The shortfall was attributed to a weaker December in the diabetes GLP-1 market, which may have been influenced by alterations in Part-D or insurance edits, and a smaller inventory build compared to previous years. According to InvestingPro analysis, Eli Lilly currently trades at a P/E ratio of 79.6, reflecting high market expectations for future growth.
Eli Lilly's looking ahead to 2025 with adjustments to their assumptions. BMO Capital sees potential for the company to outperform expectations through continued effective commercial strategies and several product launches. InvestingPro data shows the company maintains strong financial health with an overall score of "GOOD," supported by robust profit metrics and positive price momentum. Additionally, the firm is anticipating positive outcomes from the upcoming Phase 3 data for orforglipron, which is expected in the second quarter of 2025.
The analyst from BMO Capital expressed confidence in Eli Lilly's ability to navigate the challenges presented in the fourth quarter of 2024. They pointed out that the issues faced were explainable and that the company has already made the necessary adjustments as it plans for the year 2025.
Eli Lilly's diverse product pipeline and forthcoming clinical data are seen as drivers for growth. The company's commitment to commercial execution across its range of launches is expected to contribute to its success in the coming years.
The affirmation of the $1,010 price target by BMO Capital Markets reflects a belief in Eli Lilly's long-term value and its potential to perform well in the pharmaceutical market. The company has demonstrated its commitment to shareholder value by maintaining dividend payments for 55 consecutive years, with a 32.7% dividend growth in the last twelve months.
This outlook remains unchanged despite the recent hiccup in the fourth quarter of 2024. For deeper insights into Eli Lilly's valuation and growth prospects, investors can access comprehensive analysis and 14 additional ProTips through InvestingPro's detailed research reports.
In other recent news, Eli Lilly reported a Q4 revenue of $13.5 billion, falling short of the consensus estimate of around $14 billion. This shortfall was attributed to weaker-than-expected sales from its Mounjaro and Zepbound portfolio. Wells Fargo (NYSE:WFC) maintained its Overweight rating and $1,000 price target on Eli Lilly, suggesting that the miss was more related to supply constraints rather than a lack of consumer interest.
Eli Lilly also recently acquired Scorpion Therapeutics' PI3Kα inhibitor program in a deal that could total $2.5 billion. The company provided guidance for 2025, projecting total revenues between $58 and $61 billion, reflecting a positive growth outlook.
Analysts from BofA Securities and Citi maintain a Buy rating on Eli Lilly, with targets at $997 and $1,250 respectively. Citi analysts underscored the potential of Eli Lilly's oral GLP-1 treatment candidate, Orforglipron, expected to launch in early 2026. These are the recent developments for Eli Lilly.
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