Eli Lilly and Company (LLY): A Bull Case Theory

Eli Lilly and Company discovers, develops, and markets quality pharmaceuticals successful the United States, Europe, China, Japan, and internationally. LLY presents a compelling BUY accidental arsenic a planetary person addressing large wellness issues, including obesity and Alzheimer’s. The company’s value nonaccomplishment drugs, Mounjaro and Zepbound, alongside late-stage pipeline assets similar Donanemab, person demonstrated beardown momentum, with Mounjaro sales up 68% YoY and Zepbound up 172%, yet the banal has fallen 18% YTD, creating a mispricing opportunity.

Lilly dominates the cardiometabolic wellness segment, which accounts for astir 73% of revenue, with GLP-1 therapies driving structural shifts successful obesity and diabetes treatment. Its oncology, immunology, and neuroscience franchises connection diversification, with Alzheimer’s cause Donanemab providing important upside potential. Geographically, the U.S. represents 67% of revenues and benefits from caller Medicare/Medicaid sum for anti-obesity drugs, portion Europe grows steadily and Asia presents precocious incremental imaginable contempt regulatory hurdles.

The planetary anti-obesity cause marketplace is projected to transcend $95B by 2030, fueled by rising obesity rates and chronic metabolic diseases. Lilly’s dual-mechanism drugs, backed by robust objective data, connection superior efficacy versus competitors, including Novo Nordisk, portion caller argumentation and regulatory changes fortify pricing powerfulness and marketplace control. Operationally, Lilly is highly profitable with gross margins supra 80% and EBITDA margins astatine 46.5%, supported by a beardown equilibrium expanse and resilient currency flow. Recent banal volatility reflects short-term sentiment implicit pipeline developments alternatively than fundamentals.

Valuation utilizing DCF investigation indicates a three-year terms people of $1,317. Key risks see argumentation shifts, macroeconomic factors, and pipeline execution, but these are mitigated by scale, diversification, and beardown R&D capabilities. Given manufacture tailwinds, pipeline strength, and mispricing, Lilly offers a high-conviction concern with exceptional maturation potential.

Previously, we covered a bullish thesis connected Eli Lilly and Company (LLY) by Kontra successful May 2025, which highlighted the company’s enactment successful obesity and diabetes therapeutics, beardown GLP-1 sales, and robust pipeline development. The company's banal terms has appreciated by astir 35.43% since our coverage. This is due to the fact that the thesis played out. Christina Gan shares a akin presumption but emphasizes updated valuation and Alzheimer’s pipeline growth.