Eli Lilly Stock Price Forecast

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Eli Lilly Stock Price Forecast

Eli Lilly Stock Price Could Double in The Next 5 Years

Eli Lilly stock had a CAGR of 35.86% over the last 5 years. This means an investment of $5K would have turned into $23K over a span of 5 years. That's a lot better than the CAGR of 12.82% seen in the famous S&P 500 index.

So, should you buy Eli Lilly stock, or is it too late to enter? Let's look at what Eli Lilly is doing and what's ahead for it in the near future.

One thing about the pharma industry is that stock prices gain a lot of upside from clinical progress. So, most of the upside is already baked into the stock before even making any meaningful sales.

Eli Lilly Is Working On New Products

The same goes for Eli Lilly, which gained a lot of upside right after approval of tirzepatide. Later on, it turned out that the optimism was not wrong, as tirzepatide remains a strong growth driver for the company. It is sold under the brand names Zepbound and Mounjaro.

These brands were approved 4 years ago and remain the best-selling drugs all over the world. The tirzepatide drug has already exceeded all expectations and pushed sales to new highs.

However, it is also a reality that other companies are set to launch their own weight-loss drugs. So, this could affect teh sales of tirzepatide and will drag down the revenue. It is unlikely for Eli Lilly to maintain the same strong growth for the next 5-6 years.

However, there are some reasons to still be bullish on the Eli Lilly stock. For starters, the GLP-1 market is expected to grow rapidly in the next 5 years. This expansion of the market will bring new opportunities despite the increased competition.

Also, Eli Lilly has a next-generation obesity drug called retatrutide. Its results can be compared with what we see during a typical surgery for weight loss. Now, that's groundbreaking and something we have yet to see in any other medicine. So, that's also something that could prove to be a strong growth driver for the company.

The company is also working on another medicine called eloralintide. It can mimic the hormone called amylin. This medicine could have better tolerability as compared to most GLP-1 medicines.

Right now, Eli Lilly stock is trading at a forward P/E of 24.6. That's higher than the average of 18.9 seen in most healthcare stocks. But that premium is justified, as Eli Lilly already has a history of strong results.

If Eli Lilly's EPS grows by 20% over the next 5 years and the forward P/E remains at 20, the market cap could almost double. So, an investment of $5K will be worth $10K in the next 5 years.

So, yes, you can consider buying Eli Lilly stock if you can invest for the next 5 years. But if you have a short-term investment horizon, then you should look at other healthcare stocks.

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