3 Reasons to Buy Eli Lilly Stock Like There's No Tomorrow

Core Viewpoint - Eli Lilly has shown exceptional financial performance and market growth, leading to a high forward price-to-earnings (P/E) ratio of over 35, which is significantly above the healthcare industry average of 15.8, raising questions about the timing of investment [1][2]. Group 1: Market Leadership in Weight Loss - Eli Lilly has established itself as a leader in the diabetes drug market and has made significant strides in the anti-obesity sector, with products like Mounjaro and Zepbound generating over $1 billion in quarterly revenue [4]. - The company is advancing its pipeline with investigational drugs such as orforglipron, an oral GLP-1 medicine, and retatrutide, a triple agonist, both showing promising clinical results [5]. - Eli Lilly has outperformed its competitor Novo Nordisk in the weight management market, capitalizing on clinical successes while the latter faced setbacks [6]. Group 2: Diversification of Product Line and Pipeline - Eli Lilly's portfolio includes successful drugs like Verzenio for cancer and Taltz for immunosuppression, along with potential future blockbusters such as Kisunla for Alzheimer's and Ebglyss for eczema [8]. - The company is actively expanding its pipeline through acquisitions, including SiteOne Therapeutics for $1 billion, which focuses on a non-opioid pain treatment, and Verve Therapeutics for $1.3 billion, which develops gene-editing therapies for cardiovascular diseases [9][10]. Group 3: Financial Outlook and Valuation Justification - Despite a high valuation that may deter some investors, Eli Lilly's revenue grew by 45% year over year to $12.7 billion, with net income increasing by 29% to $3 billion, showcasing strong financial health [12]. - The company's ongoing developments in weight management and diabetes are expected to yield significant clinical and regulatory successes, supporting above-average growth in the coming years, thus justifying its premium valuation [13].