Eli Lilly & Co, the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Kerry Holford from Berenberg Bank downgraded the rating on the stock to a Hold and gave it a $830.00 price target.
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Kerry Holford has given his Hold rating due to a combination of factors that influence Eli Lilly & Co’s current market position and future prospects. Despite the company’s impressive shareholder returns over the past five years, outperforming its sector peers significantly, the expectations for its obesity and diabetes franchise have reached a high point, with forecasts slightly below consensus. This has led to a reassessment of the stock’s potential, resulting in a Hold rating.
Additionally, while Eli Lilly’s incretin product, Zepbound, is favored by obesity physicians over competitors like Wegovy, recent market dynamics have challenged its dominance. The competitive landscape is intensifying, with Novo Nordisk gaining traction and expanding its product claims. Furthermore, although Eli Lilly’s upcoming oral GLP-1, orforglipron, shows promise, the weight loss results are at the lower end of expectations. The company’s valuation, while reflecting its superior growth, trades at a premium compared to global peers, which supports the Hold rating as the stock’s current price appears fair given these considerations.
Based on the recent corporate insider activity of 119 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of LLY in relation to earlier this year.