Eli Lilly Could Sustain Industry-Leading Growth, Says Bullish JPMorgan

Eli Lilly And Co LLY is the best-positioned among large caps, given healthy core product growth, a growing portfolio of new launches and next-gen pipeline assets, potential for significant margin expansion and several sources of near- and long-term upside, according to JPMorgan.

The Analyst

JPMorgan’s Chris Schott moved to an Overweight rating on Eli Lilly with a year-end price target of $140 while adding the stock to the Analyst Focus List.

The Thesis

Eli Lilly could deliver 6-8-percent topline growth and mid-teens annual EPS growth through the next 10 years, Schott said in a Tuesday note. 

The company’s growth prospects are supported by a diversified portfolio of new launches, the analyst said. The global pharmaceutical firm is better positioned than its peers, since none of its products constitute more than 20 percent of sales, he said. Lilly's diabetes, immunology and pain franchises seem poised for healthy growth through 2024, Schott said. 

Diabetes remains a key driver for the company, with Trulicity continuing to beat expectations, the analyst said. A marked increase in Jardiance uptake has taken place in recent months, he said,

JPMorgan expects Trulicity sales to growth from an estimated $4.2 billion in 2019 to $6 billion by 2023, while Jardiance sales are expected to grow from around $1 billion in 2019 to $2 billion by 2023.

Price Action

Eli Lilly shares were up 1.92 percent at $124.45 at the time of publication Tuesday. 

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