Eli Lilly Earnings: Pipeline Gains and Great Diabetes and Weight-Loss Sales Support FVE Boost

We are increasing Eli Lilly’s fair value estimate to $500 from $450 following solid fourth-quarter results with robust sales from diabetes drug Mounjaro and strong pipeline advancements running ahead of our expectations. Eli Lilly is executing very well in selling recently launched drugs and in developing the pipeline, a key element in the firm’s wide moat. However, we still view Lilly as overvalued, with the market likely too optimistic on the firm’s weight-loss drugs. Even with our robust peak expectations of over $60 billion a year for Eli Lilly’s GLP-1 drugs in weight loss and diabetes, we still view the stock as overvalued.