Following promising news about a drug in development, an analyst monitoring Eli Lilly has reduced his price target on the company’s stock, which appears counterintuitive. Despite the significant reduction, the analyst still perceives value in the stock.
Evan David Seigerman of BMO Capital made a decision regarding Eli Lilly on Thursday morning. He lowered the price target by $110 per share, setting the new fair-value assessment at $900 per share, but maintained an outperform rating, signaling a recommendation to buy the shares.
Seigerman expressed optimism about Eli Lilly’s current noteworthy product, the obesity drug Zepbound, but voiced concerns about the broader macroeconomic environment. Reports indicate that he believes economic pressures are impacting the entire healthcare sector, with Eli Lilly, a leading American pharmaceutical company, being susceptible to these challenges.
Nonetheless, the momentum of the company with Zepbound seemed to impress him. His research shows that the drug is significantly outpacing Novo Nordisk’s Wegovy, which is the only other GLP-1 treatment approved by the U.S. Food and Drug Administration specifically for weight loss.
The global macroeconomic volatility cannot be overlooked and appears likely to persist while the current trade conflict continues to some extent. However, pharmaceutical companies are generally better shielded against these economic conditions than many other industries, as numerous drugs are essential rather than optional for patients, including obesity medications. Therefore, Eli Lilly remains a favorable stock to consider owning.
