Citi bullish on Eli Lilly as it significantly boosts price target; sees 16% upside

Michael Vi

Citi is maintaining its buy rating on Eli Lilly (NYSE:LLY) and is raising its price target to $370 from $285 (16% upside based on Wednesday’s close).

Analyst Andrew Baum upped his peak Mounjaro (tirzepatide) forecast to more than $25B from $15B due to conversations with physicians and payers. The once weekly injection is approved for diabetes, but Lilly is eying Mounjaro as a weight-loss treatment which would greatly increase revenue.

Baum sees ~$13B in Mounjaro sales in 2035 for the weight loss indication alone.

He added if upcoming data from Alzheimer’s candidates lecanemab from Eisai (OTCPK:ESALY) and gantenerumab from Roche (OTCQX:RHHBY) is not strong, it would provide an opportunity to add to positions. Lilly is pursuing donanemab for Alzheimer’s.

“Given the historic outperformance and the 2x sector average multiple, the tolerance for risk is low,” Baum wrote.

However, he cautioned that there are some risks, such as if pharmacy benefit managers use step therapy for Mounjaro and Novo Nordisk’s (NVO) Wegovy (semaglutide), which is already approved for weight loss, secures “a significant market share advantage.”

Check out why Seeking Alpha contributor Khen Elazar recently said that Lilly (LLY) is a hold.

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