Eli Lilly (LLY) is falling today due to reports of progress from competitors. The pharmaceutical producer has struggled recently as its share of the obesity treatment pill market has been threatened. An obesity treatment pill from Viking Therapeutics (VKTX) recently turned heads on Wall Street, sending shares up. Now, AstraZeneca (AZN) is reporting positive trial results from its own obesity pill.
Why Is Eli Lilly Stock Down Today?
Despite rising earlier today, Eli Lilly stock appears to have run out of momentum. As of this writing, it is down 1.7% for the day and isn’t showing signs of a rebound. Trading has been volatile since shares dipped, but LLY stock remains in the green for the week. It is still up 1.7% for the past five days even after today’s decline.
Today’s heavy trading volume as shares fall suggests that LLY stock is in the midst of another selloff. A similar phenomenon transpired on October 31 after Eli Lilly missed Wall Street estimates for Q3 earnings. This may have been prompted by the fact that other firms are reporting progress that, if sustained, could severely compromise Lilly’s share of a fast-growing market that is expected to keep expanding.
With both Viking Therapeutics and AstraZeneca making advancements, Eli Lilly will need to act fast or be left behind. The Fly reports that “Astra [] presented early data on two other obesity drugs on Monday – a drug targeting the hormone amylin and an injectable GLP-1 – and noted that all three obesity assets are moving to mid-stage trials and were “highly competitive.”
Is Eli Lilly Stock a Buy, Sell, or Hold?
Despite these conditions, Wall Street is mostly bullish on Eli Lilly. Analysts have a Strong Buy consensus rating on LILY stock based on 18 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 37% rally in its share price over the past year, the average LILY price target of $1,045 per share implies 29% upside potential.
See more LILy stock analyst ratings
One analyst isn’t swayed by the threat that rising competition may pose to Eli Lilly. In a report published today, Carter Gould of Barclays (BCS) maintained a Buy rating and assigned a price target of $975, implying an upside potential of more than 20%.
