Eli Lilly Stock Soars After Novo Nordisk Lowers Guidance
Eli Lilly’s stock has shown a significant increase following a recent announcement from competitor Novo Nordisk regarding its lowered growth outlook.
Eli Lilly’s Stock Performance
On November 5, Eli Lilly’s stock (LLY) rose in response to Novo Nordisk’s (NVO) expected slowdown in growth for its weight-loss products. The news has boosted investor confidence in Lilly, while Novo Nordisk’s stock fell approximately 3%.
Competitive Landscape in Weight-Loss Drugs
Both companies are major players in the lucrative weight-loss drug market. Eli Lilly has seen benefits as Novo Nordisk’s operating profit growth forecast was revised down from 4% to 7%, a decline from a prior estimate of 4% to 10%. Furthermore, Novo’s sales growth projection decreased from a possible 14% to a new range of 8% to 11%.
Impact of Copycat Drugs
- Copycat versions of drugs like Ozempic and Wegovy are impacting Novo Nordisk’s sales.
- Novo Nordisk’s stock has experienced a near 50% decline year-to-date.
- Third-quarter earnings reported by Novo showed $0.69 per share on revenues of $11.5 billion, missing analyst expectations.
Eli Lilly’s Market Position
In contrast, Eli Lilly has recently exceeded earnings forecasts, primarily driven by robust sales of its weight-loss medication, Mounjaro. The positive performance has led to a consensus Strong Buy rating among 22 Wall Street analysts for Eli Lilly.
Analyst Insights
- 18 analysts recommend buying Eli Lilly stock.
- 4 analysts recommend holding it.
- The average price target for LLY is $917.63, indicating a potential downside of 2.14% from current levels.
Future Prospects for Novo Nordisk
Despite the recent setbacks, Novo Nordisk has secured a deal regarding Medicare pricing. Reports suggest U.S. President Donald Trump is expected to announce that the lowest dose of Wegovy will be priced at $149, contingent upon Medicare and Medicaid coverage.
These developments underline the competitive dynamics in the weight-loss drug market and the shifting fortunes of Eli Lilly and Novo Nordisk. Investors will continue to monitor these companies closely as new information becomes available.
