Eli Lilly and Co

LLY: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$896.00	Ghl	Gjjymntdrn

Eli Lilly Earnings: Strong Diabetes and Obesity Sales Lifts Fair Value, but Shares Still Overvalued

Damien Conover

Aug 8, 2024

We are increasing our fair value estimate for wide moat Eli Lilly to $580 from $540 following better-than-expected second-quarter results, largely driven by Mounjaro (diabetes drug) and Zepbound (obesity drug). However, we believe the stock still looks overvalued. While we project significant sales for Mounjaro and Zepbound, the market seems too bullish on the drugs and is not likely fully accounting for expected price declines, high cost burden for some patients, eventual competition beyond Novo Nordisk, tolerability issues, and potential long-term safety issues.

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