(Bloomberg) — Eli Lilly & Co.'s tireless stock record has Morgan Stanley analysts pondering whether it will become the first U.S. company outside the Magnificent Seven to reach a market value of $1 trillion.
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Analysts on Friday raised their price target for the weight-loss drug maker to the highest on Wall Street, a level that would raise its market capitalization to about $900 billion, according to Bloomberg calculations.
“Could Lilly be the first $1 trillion biopharma stock?” Terence Flynn and colleagues at Morgan Stanley asked in a note to clients. “We continue to see a path for further upside.”
Shares of the drugmaker rose 3.2% on Friday, hitting a new record high. The stock has risen 34% this year, helped by demand for diabetes and obesity drugs Mounjaro and Zepbound. As a result, Lilly's market capitalization rose to over $740 billion, making it one of the ten most valuable companies in the S&P 500 Index.
Lilly's market value surpassed that of Tesla Inc. last month after disappointing earnings and growth concerns for the electric car maker, which hit $1 trillion in 2021 but has since fallen out of that select group. The $1 trillion-plus club now consists of Microsoft Corp., Apple Inc., Nvidia Corp., Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. The only non-tech company with a market capitalization greater than Lilly is Berkshire Hathaway Inc.
Several analysts raised their price targets on Lilly this month following positive earnings results, including those of Societe Generale SA, Jefferies and Barclays Plc, according to data compiled by Bloomberg. However, some seem to be betting that the optimism is already priced in: Lilly shares closed at $782.06 on Friday, compared to analysts' average price target of $756.
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The company's blockbuster diabetes drug Mounjaro is widely used off-label for weight loss, while Zepbound, recently approved for weight loss, is expected to become the best-selling drug in history.
– With assistance from James Cone and Angel Adegbesan.
(Updates with closing prices throughout.)
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