Eli Lilly stock (NYSE: LLY) has seen a remarkable increase of 400% from early 2021 to around $840 currently, outperforming peers such as Pfizer and Johnson & Johnson. This surge can be attributed to a 273% rise in the company’s P/S ratio, a 39% increase in revenue, and a 5% rise in shares outstanding. The stock has consistently outperformed the S&P 500 in recent years and has provided better returns with less risk compared to other heavyweights in the Health Care sector and megacap stars. The Trefis High Quality Portfolio has also outperformed the benchmark index each year.
Despite the uncertain macroeconomic environment with high-interest rates, LLY stock has priced in most of the positives. Further positive developments around its pipeline and better sales of its diabetes and obesity drugs could lead to even higher levels. Analysts’ average price estimate for Eli Lilly is $860, suggesting that it is appropriately priced. The company’s revenues have increased by 39% from 2020 to 2023, driven by market share gains for drugs like Mounjaro, Verzenio, and Zyprexa. The diabetes drug Mounjaro and the obesity drug Zepbound are expected to see significant growth, with combined peak sales estimated at $50 billion.
Investors have recognized and rewarded LLY stock for its solid pipeline potential, particularly in the obesity drugs segment. The rise in Eli Lilly’s P/S ratio is based on future potential, indicating strong sales growth in the coming years. The obesity drugs market is expected to grow substantially by 2030, with Eli Lilly and Novo Nordisk dominating the market. Any dip in LLY stock could present an opportunity for long-term gains. It is important to compare Eli Lilly’s performance with its peers to assess its position in the industry and make informed investment decisions.
Investing with Trefis Market-Beating Portfolios and utilizing peer comparisons across industries can provide valuable insights for investors. Overall, Eli Lilly’s stock performance, driven by its revenue growth, pipeline potential, and market share gains, suggests continued upward momentum in the future. While uncertainties exist in the market, Eli Lilly’s strong performance and positive outlook make it an attractive investment option for investors seeking growth opportunities in the healthcare sector.
