Weight loss drugs are the big new thing and those companies who actually have them are poised to do big things. While Eli Lilly (LLY) was one of the biggest names around in the industry, there are signs that the competition is heating up. But investors still plunked down cash on the current frontrunner, and Eli Lilly shares were up fractionally in Monday afternoon’s trading.
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The biggest problem for Eli Lilly today was a report that Roche (RHHBY) was continuing to develop its weight loss drugs. In fact, reports note that two of Roche’s obesity drug candidates could hit the market within the next few years, and that poses a serious risk to Eli Lilly’s lead in this market.
What makes it even worse is that Roche’s drugs have a critical advantage over Eli Lilly’s; they’re pills as opposed to injections. That makes for a serious advantage even among current Eli Lilly users. Although they may be getting used to self-injections, they may start to prefer the pill if such an option becomes available and works anywhere near as well.
Is It Smart to Buy Eli Lilly Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 18 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 79.21% rally in its share price over the past year, the average LLY price target of $952.16 per share implies 17.82% upside potential.
