Eli Lilly Stock Gets New Street-High Price Target – Citi Says Oral Weight-Loss Drug Sales Potential Is Underestimated

Eli Lilly (NYSE:LLY) shares have been hitting new highs, boosted by a recent strong earnings report and another raised outlook for the year.  

With the stock now edging towards a $1 trillion market cap, Citi analyst Geoff Meacham thinks there’s more fuel in the tank, and has raised his price target from $1,250 to a Street-high of $1,500, suggesting the stock will gain another 47% in the months ahead. Meacham’s rating stays a Buy. (To watch Meacham’s track record, click here)

Meacham’s bullish stance is due to high hopes for orforglipron, LLY’s oral GLP-1 medication being tested for the treatment of type 2 diabetes and obesity. “Expectations for Lilly’s orforglipron (oral GLP-1) have steadily risen given a competitive product profile, high consumer interest, and broadening access,” the analyst explained. “Indeed, following our NDR with Lilly’s CEO Dave Ricks, we came away increasingly bullish on the orforglipron (oral GLP-1) launch which adds significant optionality to shares.”

It’s understandable why Ricks would like to big-up the drug’s chances but he’s not the only one striking a positive tone.

Meacham says investor discussion around orforglipron has shifted from “certainty of commercialization” to how widely it will be adopted, especially following the Most Favored Nation (MFN) pricing announcement for GLP-1 drugs – a policy ensuring that Medicare and Medicaid beneficiaries will receive the lowest available prices. While it remains to be seen what the market response will be, feedback from numerous KOLs (key opinion leaders) has been “resoundingly positive.” Dr. Louis Philipson of the University of Chicago described the drug’s Phase 3 ACHIEVE-1 results as “spectacular,” suggesting it supports first-line use in treating type 2 diabetes. Similarly, Dr. Vanita Aroda of Harvard Medical School noted that the drug will likely see broad use in primary care settings.

Meacham thinks that “perhaps the most validating comment” came from Dr. Mehmet Burak from Brigham and Women’s Hospital, who praised orforglipron’s weight-loss effectiveness, tolerability, simple dosing, and flexibility across obesity-related conditions, saying it could even become “the number one selling drug on earth.”

As such, Meacham thinks orforglipron’s first-year sales potential is being underestimated. The drug is positioned to capitalize on the success of earlier injectable GLP-1 treatments, which have already been a “sales phenomenon” and proven highly effective. With payer challenges now well understood and an expanded Medicare market from launch, Meacham believes orforglipron has “substantially more launch dry powder vs. injectables to fuel initial and long-term momentum.”

Meacham continues to see a peak 2030 opportunity above $40 billion, though his 2030 sales forecast is now $18.2 billion, up from $11.2 billion previously and above the Street’s $12.1 billion estimate.

Most analysts back Meacham’s thesis. Based on a mix of 18 Buys vs. 3 Holds, the stock claims a Strong Buy consensus rating. However, going by the $1,012.26 average target, shares will stay rangebound for the time being. With this in mind, watch out for either further price target hikes or rating downgrades shortly. (See LLY stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.