Eli Lilly and Company (LLY): A Bull Case Theory

Core Thesis - Eli Lilly and Company (LLY) presents a compelling BUY opportunity due to its leadership in addressing major health issues, particularly obesity and Alzheimer's, despite a recent stock price decline [2][5] Financial Performance - As of November 28th, LLY's share price was $1,075.47, with trailing and forward P/E ratios of 52.69 and 33.90, respectively [1] - Mounjaro sales increased by 68% year-over-year, while Zepbound sales surged by 172%, indicating strong momentum in the company's weight loss drug segment [2] - The company has gross margins above 80% and EBITDA margins at 46.5%, reflecting high profitability [4] Market Position - LLY dominates the cardiometabolic health segment, which constitutes nearly 73% of its revenue, driven by GLP-1 therapies [3] - The U.S. market accounts for 67% of revenues, benefiting from new Medicare/Medicaid coverage for anti-obesity drugs, while Europe and Asia present growth opportunities [3] Industry Outlook - The global anti-obesity drug market is projected to exceed $95 billion by 2030, driven by rising obesity rates and chronic metabolic diseases [4] - Recent policy and regulatory changes enhance LLY's pricing power and market control, positioning the company favorably against competitors like Novo Nordisk [4] Valuation and Growth Potential - A DCF analysis indicates a three-year price target of $1,317 for LLY, supported by strong pipeline growth and industry tailwinds [5] - The company's scale, diversification, and strong R&D capabilities mitigate key risks such as policy shifts and macroeconomic factors [5]