2 Reasons Why Eli Lilly's Stock Likely Hasn't Peaked

Core Viewpoint - Eli Lilly's stock, despite its high valuation, is expected to continue rising due to strong demand for its products and potential increases in insurance coverage for its weight loss drug Zepbound Group 1: Demand and Capacity - Eli Lilly is currently unable to meet the high demand for its popular treatments, Mounjaro and Zepbound, with demand exceeding supply significantly [2] - The company is investing heavily to increase its manufacturing capacity, including a $9 billion investment in a new plant in Indiana, marking the largest investment in its history [2] - Revenue from Mounjaro reached $1.8 billion in Q1 2024, more than tripling from the previous year, while Zepbound generated $517 million in its initial sales [3] Group 2: Insurance Coverage and Future Growth - As of April 1, Zepbound has 67% commercial insurance coverage, which is crucial for patient affordability [4] - Increased insurance coverage is anticipated as weight loss drugs like Zepbound may provide additional health benefits, similar to rival Wegovy [4] - Eli Lilly is optimistic about Zepbound potentially receiving approval for treating sleep apnea, which could further enhance insurance coverage and demand [5] Group 3: Investment Outlook - Eli Lilly is poised for significant revenue growth, and while its current valuation reflects some of this potential, strong future results could lead to increased investor confidence [6] - Short-term fluctuations may occur due to the stock's high price, but long-term prospects remain strong as Zepbound and Mounjaro seek additional approvals [6] - The company is considered a worthwhile long-term investment despite its seemingly expensive valuation [6]