Eli Lilly’s stock (LLY) is trending higher on Nov. 5 after archrival Novo Nordisk (NVO) lowered its growth outlook for its competing weight-loss drugs.
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U.S.-based Eli Lilly and Europe’s Novo Nordisk compete head-to-head in the red-hot weight-loss drug space. And what’s bad for Novo Nordisk is apparently good news for Eli Lilly. NVO stock is down 3% after the company said it faces competitive pressure from copycat versions of its weight-loss drugs Ozempic and Wegovy. LLY stock is up 3% on that news.
Management at Novo Nordisk said they now expect operating profit growth of 4% to 7% at constant exchange rates this year, down from a previous range of 4% to 10%. Sales growth is expected at between 8% and 11%, down from as high as 14% previously. The guidance has hurt NVO stock, which has been cut nearly in half this year.
Copycats
Novo reported third-quarter earnings of $0.69 a share on revenue of $11.5 billion. The company missed Wall Street forecasts on both the top and bottom lines. Management blamed the poor results on one-off restructuring costs and continued problems with copycat versions of its weight-loss drugs. In contrast, Eli Lilly recently topped earnings forecasts on strong sales of its Mounjaro weight-loss medication.
On a positive note, Novo Nordisk said it has reached a deal with the White House on Medicare pricing. Media reports say that U.S. President Donald Trump will announce in coming days that the lowest dose of Wegovy will be sold for $149 in return for Medicare and Medicaid coverage of the drug.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 22 Wall Street analysts. That rating is based on 18 Buy and four Hold recommendations issued in the last three months. The average LLY price target of $917.63 implies 2.14% downside from current levels.
