LLY Stock Set For A 20% Breakout?

Core Insights - Eli Lilly stock (NYSE: LLY) is currently trading within a support range of $688 to $761, where it has historically bounced back significantly [2] - Over the past decade, the stock has attracted buying interest at this level five times, achieving an average peak return of 22.4% [3] Technical and Fundamental Analysis - Eli Lilly announced a $6.5 billion investment to build a new manufacturing facility in Houston, Texas, aimed at producing orforglipron, an experimental oral weight-loss pill awaiting FDA approval [5] - This investment reflects management's confidence in its GLP-1 pipeline and positions the company to capture significant market share in the oral obesity treatment market [5] Financial Performance - Eli Lilly reported a revenue growth of 36.8% for the last twelve months (LTM) and an average growth of 23.4% over the past three years [8] - The company has a free cash flow margin of nearly -0.09% and an operating margin of 43.0% LTM [8] - The lowest annual revenue growth in the last three years was 1.5% [8] - Eli Lilly trades at a P/E ratio of 47.1, indicating a higher valuation compared to the S&P [8] Market Position and Risks - Despite strong fundamentals, Eli Lilly is not immune to market downturns, having experienced declines of 51% during the Global Financial Crisis and 43% during the Dot-Com bubble [9] - Recent market turbulence has also led to declines ranging from 18% to 22% [9]