Eli Lilly Stock: Buy, Sell, or Hold? Experts Weigh In!
Eli Lilly and Company (LLY), a pharmaceutical giant with a $728.8 billion market cap, faces mixed market sentiment. While the company boasts a rich history of innovation dating back to 1876, its stock performance has lagged behind the broader market over the past 52 weeks. LLY shares have decreased by 1.2%, while the S&P 500 Index ($SPX) has surged by 21.5% during the same period. Year-to-date, LLY stock has also underperformed, showing a marginal drop compared to the $SPX's 7.1% rise.
Eli Lilly vs. Competitors
Despite underperforming the broader market, Eli Lilly has fared better than its sector peers. The company has outpaced the Health Care Select Sector SPDR Fund's (XLV) 9.8% fall over the past 52 weeks and a 3.7% drop this year. This suggests that while the overall market is bullish, the healthcare sector, and Eli Lilly within it, face specific headwinds or investor concerns.
Medicare Pilot Program Boost
Recent news provided a positive catalyst for Eli Lilly. On August 1st, the company's shares rose by more than 2% following a Washington Post report detailing a potential five-year pilot program. This program would allow Medicare and Medicaid to cover high-cost GLP-1 weight-loss drugs, including Eli Lilly's Mounjaro and Zepbound, starting in April 2026 for Medicaid and January 2027 for Medicare. The program would be under the direction of the CMS Innovation Center. This development signals a significant opportunity for Eli Lilly to expand its market reach and revenue streams.
Analyst Expectations and Earnings
Analysts anticipate substantial earnings growth for Eli Lilly in fiscal year 2025, projecting a 69.8% increase to $22.05 per share. However, the company's earnings surprise history is mixed, having beaten consensus estimates in two of the last four quarters and missed in the other two. This inconsistency adds an element of uncertainty for investors.
Wall Street Consensus
What are analysts saying?
Currently, the consensus among analysts covering Eli Lilly stock is varied. Investors should carefully consider these factors and conduct thorough research before making any investment decisions. The future performance of LLY stock will likely depend on the successful execution of its pipeline, the impact of the Medicare pilot program, and its ability to consistently meet or exceed earnings expectations.