CNBC host Jim Cramer says that the stock of Eli Lilly (LLY) has been “laid to waste” after the pharmaceutical giant reported disappointing trial results for its new weight-loss pill.
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On his show “Mad Money,” Cramer said, “I look at the drug stocks and I can’t believe how awful they are, with Eli Lilly last joining the ugly fray with its less than impactful, less thought weight-loss pill. The Street was hoping that Lilly would be able to replace its onerous GLP-1 injection with a simple pill that would produce an equal amount of weight loss. No such luck. The stock, it just got poleaxed, laid to waste.”
Cramer was referring to recent late stage trial results that showed Eli Lilly’s weight-loss pill led patients to shed 12% of their body weight. Wall Street was hoping for 15% weight loss among people in the clinical trial. Still, the results are good enough for Eli Lilly to have the pill approved by regulators in 2026.
Staying Long
Cramer has long been bullish on LLY stock, which he owns for the Charitable Trust that he manages. While he trimmed his holding of Eli Lilly before the company’s recent financial results were made public, he also upgraded the shares after their recent 15% decline on news that the company’s CEO paid $1 million to buy-the-dip in the stock.
“The Achilles heel of these drugs is that they’re too effective. At some point, you lose enough weight, and you might think you can stop taking them… Whatever the case, if Eli Lilly is going to break out from this level, it needs breakthroughs in new areas, heart, brain, that it just doesn’t have right now, or there has to be some new data that shows something else positive that the GLP-1 drugs can do,” said Cramer.
LLY stock is down 11% this year.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 21 Wall Street analysts. That rating is based on 17 Buy and four Hold recommendations issued in the last three months. The average LLY price target of $936.89 implies 36.44% upside from current levels.
