There was good news and bad news for Eli Lilly & Co (NYSE:LLY) today. The healthcare stock revealed that it’s going to have a tough time keeping up with demand for some of its drugs, a development that’s both good and bad simultaneously. Meanwhile, investors took this in stride, sending Eli Lilly shares down fractionally in Wednesday afternoon’s trading.
Apparently, the demand for its line of diabetes and weight loss drugs will be so substantial this year that it’s a safe bet Eli Lilly won’t be able to produce enough to keep the shelves stocked. That includes its entire tirzepatide line, whether under the Mounjaro brand or the Zepbound brand. Eli Lilly revealed that it’s ramping up production now, but that’s a process that won’t be done overnight.
That, in turn, will all but ensure supply shortfalls, at least in the short term. This is both good and bad news, as it ensures that Eli Lilly will have brisk sales of whatever it can produce, but also invites competition into the field to pursue the spillover market.
Room for Growth?
With a demand base like that, it’s not surprising that some analysts are looking for more growth out of Eli Lilly. Diabetes is on the rise worldwide. By 2050, it’s estimated that over one billion people on the planet will have the condition. Throw in the bulk of users for weight loss treatments—which happen to be, effectively, the same drug—and the market only expands from there.
Is Eli Lilly a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 16 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 152.28% rally in its share price over the past year, the average LLY price target of $822.23 per share implies 5.64% upside potential.
