Investors were taking a healthy spoonful of the medicine that is Eli Lilly (LLY 0.50%) stock on Hump Day. They traded the company's shares up by nearly 2% on an analyst's recommendation upgrade. That figure was well above the scant (0.1%) gain posted by the S&P 500 index that day.
Lilly gets an upgrade from Europe
The upgrade came from Hans Engel, a prognosticator at Austria's Erste Bank. Before market open, Engel changed his rating on Eli Lilly stock to buy from his previous hold. His price target on the stock was not immediately apparent.
The analyst believes that the U.S. pharmaceutical giant will manage to raise its 2024 revenue at a high double-digit-percentage rate and will also show meaningful top-line growth next year. Better, he forecast that both operating and net income will grow at even faster rates than revenue.
Engel took pains to mention Zepbound, which is the company's diabetes treatment Mounjaro approved specifically for weight loss. This is a very promising pharmaceutical segment these days, not least because taking a pill or receiving an injection is far easier than adhering to a disciplined exercise and dietary regime.
Big potential gains from weight loss
The weight loss space continues to be dominated by Denmark-based Novo Nordisk (NVO 0.02%), with its drug Wegovy. But Eli Lilly is larger and better capitalized, and as such is sure to be a hot competitor in the segment. Engel's new take on the company's stock is fully plausible, and for that reason it resonated with investors on Wednesday.
