Lilly Moves Past 50-Day SMA: Should You Consider Buying the Stock Now?

Core Insights - Eli Lilly and Company's stock has shown signs of recovery after a significant decline following its second-quarter results, moving above the 50-day Simple Moving Average, indicating a potential bullish trend [1][2][8] - The stock's recovery is attributed to positive data from the ATTAIN-2 phase III study on orforglipron, which met all primary and key secondary endpoints, alleviating some investor concerns raised by earlier disappointing data from the ATTAIN-1 study [3][4][8] Company Performance - Lilly's stock has increased by 18% since the second-quarter results, reflecting improved investor sentiment [4] - The company's cardiometabolic division is its strongest segment, driven by the success of GLP-1 therapies Mounjaro and Zepbound, which together account for approximately 50% of total revenues [5][6] - Mounjaro and Zepbound have seen rising demand, with production capabilities expected to increase significantly in the second half of 2025 [10][9] Product Pipeline and Growth - Lilly is expanding its obesity treatment pipeline, with several new molecules in clinical development, including orforglipron and retatrutide [14][16] - The company has launched Mounjaro in new international markets and received regulatory approvals for additional indications, which are expected to further boost sales [12][11] - Lilly anticipates revenues between $60.0 billion to $62.0 billion in 2025, representing over 30% year-over-year growth [35] Competitive Landscape - The obesity market is projected to reach $100 billion by 2030, leading to increased competition, particularly from Novo Nordisk and other companies developing GLP-1-based therapies [22][24] - Lilly faces competition from Novo Nordisk's semaglutide products and other emerging candidates from companies like Amgen and Viking Therapeutics [22][23][25] Stock Valuation and Estimates - Lilly's stock is currently trading at a price/earnings ratio of 26.35, higher than the industry average of 14.79, but below its 5-year mean of 34.54 [30][27] - The Zacks Consensus Estimate for 2025 earnings per share has increased from $21.90 to $23.03 over the past 60 days, indicating a positive outlook from analysts [33][34] - Despite competitive pressures and a high valuation, the stock's recent recovery suggests potential for long-term investors [36]