Deutsche Bank is out with a bullish call on Eli Lilly (LLY), raising its rating on the pharma stock from Hold to Buy and lifting its price target by $300 to a total of $1,025 a share. Deutsche Bank Analyst James Shin joins Catalysts to break down the call and the pharmaceutical company’s outlook.
Shin says the biggest driver behind the call is Eli Lilly’s improved visibility. He explains, "they had outsized expectations and they beat them," pointing to GLP-1 weight-loss drug Mounjaro coming out of an FDA (Food and Drug Administration) shortage and meeting its benchmark goal of one and 1.5-times sellable doses.
"This is a great backdrop, right? Demand outstripping supply. You’re selling everything you got. It’s just a good story," he adds.
Shin explains that despite improving its supply, Eli Lilly has shown that "you can’t walk into your pharmacy and get anything off the shelf right now." As it focuses on meeting real-time demand, the pharmaceutical giant is focused on building new facilities and investing in its production capabilities.
Morgan Stanley named Eli Lilly a top pick last week, citing it to have the "strongest growth profile" within its coverage universe.
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