Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 17 Apr, 25 | LLY | Buy | USD 734.9 | USD 771.65 | USD 801.04 | 4 days | 9.0% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity. It provides oncology products, including Alimta, Cyramza, Erbitux, Jaypirca, Retevmo, Tyvyt, and Verzenio. In addition, the company offers Olumiant for rheumatoid arthritis, atopic dermatitis, severe alopecia areata, and COVID-19; Taltz for plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondylarthritis; Omvoh for ulcerative colitis; Cymbalta for depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, fibromyalgia, and chronic musculoskeletal pain; Ebglyss for severe atopic dermatitis; and Emgality for migraine prevention and episodic cluster headache. Further, it provides Cialis for erectile dysfunction and benign prostatic hyperplasia; and Forteo for osteoporosis. It operates Lilly Seaport Innovation Center (LSC), a research and development facility in the Boston Seaport to advancing Lilly's efforts in RNA and DNA-based therapies as well as discovering new drug targets to create life-changing medicines across several disease states, including diabetes, obesity, cardiovascular diseases, neurodegeneration, and chronic pain. It has collaborations with Incyte Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; F. Hoffmann-La Roche Ltd and Genentech, Inc.; Biologics, Inc., AbCellera Biologics Inc.; Verge Genomics; and Chugai Pharmaceutical Co., Ltd, as well as development collaboration with Eli Lilly and Company for developing QIAstat-Dx IVD panel, for the detection of various APOE genotypes. The company was founded in 1876 and is headquartered in Indianapolis, Indiana.
EPS Expansion: Non-GAAP EPS rose 114% to $5.32, demonstrating strong profitability despite continued R&D investment
Revenue Growth: A 45% increase in quarterly revenue to $13.53 billion, primarily from Mounjaro and Zepbound
Increase in Impairment Charges: Asset impairment and restructuring charges surged to $344.0 million, up from $67.7 million in Q4 2023
Realized Price Pressure: A 4% overall decrease in realized prices, with Mounjaro contributing significantly to this decline
Eli Lilly's dependence on the continued commercial success and regulatory expansion of a few key products like Mounjaro and Zepbound poses a significant risk if market dynamics or regulatory challenges negatively impact these therapies
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 734.9 | 668.76 | 771.65 | 801.04 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Revenue Performance Driven by Key Products: Eli Lilly and Company (NYSE: LLY) reported a 45% year-over-year increase in revenue for the fourth quarter of 2024, reaching $13.53 billion. This growth was primarily attributed to a 48% rise in product volume, led by strong performance from Mounjaro and Zepbound. However, the company experienced a 4% decline in realized prices, largely driven by Mounjaro, partially offset by positive contributions from Zepbound and Humalog. U.S. revenue increased 40% to $9.03 billion, while international revenue surged 55% to $4.50 billion.
Earnings Surge on Volume and Product Mix: Lilly reported significant earnings growth, with GAAP net income rising 101% to $4.41 billion and GAAP earnings per share (EPS) increasing 102% to $4.88. On a non-GAAP basis, net income grew 114% to $4.81 billion and EPS rose by the same margin to $5.32. These figures include $0.19 per share in acquired in-process research and development (IPR&D) charges, reflecting Lilly’s continued investment in innovation and strategic acquisitions.
Enhanced Profitability Through Gross Margin Expansion: The company’s gross margin improved by 47% to $11.13 billion, with gross margin as a percentage of revenue increasing to 82.2%, up 1.3 percentage points. On a non-GAAP basis, gross margin reached 83.2%, an increase of 0.9 percentage points. The expansion in gross margin was largely driven by a favorable product mix, partially offset by reduced realized prices.
Research and Commercial Investment Supports Future Growth: Research and development expenses increased by 18% to $3.02 billion in Q4 2024, reflecting Lilly's ongoing commitment to advancing its early and late-stage pipeline. Marketing, selling, and administrative expenses also rose 26% to $2.42 billion, driven by promotional efforts for new and upcoming product launches. These investments are expected to support sustained long-term growth.
Regulatory and Pipeline Advancements: Lilly achieved several important regulatory milestones, including the U.S. FDA approval of Zepbound for obstructive sleep apnea in obese adults and Omvoh for Crohn’s disease. Positive trial results from the SURMOUNT-5 and BRUIN CLL-321 studies, as well as promising Phase 2 outcomes for muvalaplin, further reinforce the strength of Lilly’s R&D pipeline. The company also received approval for Kisunla in China for early symptomatic Alzheimer’s disease.
Strategic Investments and Shareholder Returns: Lilly announced the pending acquisition of Scorpion Therapeutics’ mutant-selective PI3Kα inhibitor program and committed $3 billion to expand its parenteral manufacturing facility in Wisconsin. In addition, Lilly initiated a $15 billion share repurchase program and increased its quarterly dividend by 15% for the seventh consecutive year, signaling continued confidence in its financial strength and growth prospects.
Forward-Looking Guidance Reflects Optimism: For 2025, Eli Lilly provided financial guidance with projected revenue in the range of $58.0 billion to $61.0 billion. EPS is expected to range from $22.05 to $23.55, and non-GAAP EPS is forecasted between $22.50 and $24.00. This outlook reflects management’s confidence in the company’s momentum, driven by product launches, pipeline progress, and operational expansion.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Eli Lilly and Company (NYSE: LLY) at the closing market price of USD 734.90, as on April 16, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Drug Manufacturers - General
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LLY Eli Lilly and Company |
-15.37 2.06% | 731.64 | 78.14 | 31.95 | 16.34 | 45.83 | 16.65 | 54.36 |
| JNJ Johnson & Johnson |
0.39 0.25% | 154.05 | 29.17 | 14.33 | 3.74 | 5.18 | 3.80 | 15.22 |
| ABBV AbbVie Inc |
-2.78 1.50% | 182.07 | 61.52 | 14.86 | 5.62 | 51.62 | 6.76 | 20.58 |
| MRK Merck & Company Inc |
-0.55 0.71% | 77.42 | 59.83 | 12.33 | 4.50 | 6.47 | 4.94 | 23.79 |
| AZN AstraZeneca PLC ADR |
0.47 0.67% | 70.39 | 38.69 | 16.31 | 4.67 | 5.46 | 5.20 | 17.74 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 16,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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