To The Moon

$Eli Lilly(LLY)$ has surged more than 50% in 2024, but some Wall Street analysts believe there's more room for growth.

Bank of America analyst Geoff Meacham is particularly excited about the company's recent progress in obesity, diabetes, and Alzheimer’s disease. He saw the stock potentially climbing to $1,150 per share, a 25% increase from its closing price on August 19.

Why is Wall Street bullish on Eli Lilly?

Eli Lilly markets several top-selling drugs, but all eyes are on their new blockbuster, tirzepatide. This drug is known under the brand names Mounjaro for diabetes and Zepbound for weight management.

The main competitor is semaglutide, sold by $Novo-Nordisk A/S(NVO)$ under the names Ozempic and Rybelsus for diabetes, and Wegovy for weight management.

While Novo Nordisk’s semaglutide sales are growing fast, they’re still lagging behind Lilly’s drug. In Q2, tirzepatide’s sales jumped 86% from the first quarter.

Investors can reasonably expect continued growth for tirzepatide. Earlier this month, Lilly showed that tirzepatide significantly improves symptoms in heart failure patients with preserved ejection fraction and obesity. It reduced the risk of dangerous heart failure by 38% compared to a placebo.

Tirzepatide now accounts for 38% of Lilly’s total sales, but it’s not the only growth driver. In the second quarter, the FDA approved Kisunla to slow the progression of Alzheimer’s disease.

Is Eli Lilly stock a good investment?

If tirzepatide and Kisunla perform as expected, buying Eli Lilly stock at current prices could yield substantial returns.

However, if unforeseen complications hamper their development in the next few years, the stock could fall well below its lofty valuation level.