With a market cap of $717 billion, Eli Lilly (LLY) is one of the world’s largest pharmaceutical companies. Lilly is well-known for its innovative drug pipeline and longstanding presence in the global healthcare industry. Its core focus areas include diabetes, obesity, oncology, immunology, neuroscience, and cardiovascular and pain management.

Last week, Goldman Sachs analyst Asad Haider upgraded Eli Lilly stock to a “Buy” from a “Neutral” rating, citing a compelling blend of strategic positioning and growth potential in the anti-obesity drug market as key reasons for his optimistic outlook. Eli Lilly’s stock is down 3.9% in the year to date, while the S&P 500 Index ($SPX) is down 9.2%. The stock is also down more than 23% from its 52-week high, led by the overall market volatility.  

Haider sees this dip as an ideal entry point into a company poised for long-term market leadership, particularly in the rapidly expanding anti-obesity drug space.

Why Is Goldman Sachs Bullish on Eli Lilly Stock?

Haider’s optimism stems from Eli Lilly’s dominant position in the obesity and incretin markets, which are expected to grow significantly in the coming years. He cites the company’s early mover advantage, strong manufacturing capabilities, and comprehensive cardiometabolic portfolio as critical differentiators that will allow Lilly to outperform competitors as demand grows. 

For context, the fourth quarter alone saw a staggering 45% increase in Lilly’s revenue, owing to the explosive success of newly launched drugs, particularly Mounjaro and Zepbound. These two therapies are quickly reshaping the obesity and diabetes treatment landscape. New products generated $5.6 billion in Q4, with Mounjaro generating $3.5 billion globally and Zepbound generating $1.9 billion in sales. 

Furthermore, Lilly’s non-incretin portfolio performed well, growing 20% in Q4, thanks to contributions from oncology, neuroscience, and immunology drugs such as Omvoh, Jaypirca, and Kisunla. 
Haider also stated that Lilly’s focus on high-impact markets, combined with efforts to accelerate product monetization timelines, could generate new product cycles and unlock value well before any significant patent expirations happen. In the Q4 earnings call, management stated that Lilly increased its global manufacturing footprint in 2024. It also expanded its global presence by launching Mounjaro in all major European markets and establishing early stage access in China. This resulted in an 82% increase in European revenue, with revenue in Japan and China rising 27% and 13%, respectively, in Q4. Adjusted earnings increased 106% during the quarter. 

This dramatic increase in earnings has enabled the company to pay and raise dividends consistently.  It returned more than $1 billion in dividends and $2 billion in share repurchases in Q4. The company also announced a $15 billion share repurchase program and a 15% dividend increase for 2025. Lilly has increased its dividends for the past 11 years, paying out a forward dividend yield of 0.81%. 

Eli Lilly Positions Itself for Continued Growth in 2025

In 2024, Lilly advanced eight new Phase 3 programs and submitted key regulatory filings, including Tirzepatide for heart failure and Imlunestrant for metastatic breast cancer, among others. The company received regulatory approvals for breakthrough medicines such as Kisunla, Ebglyss, and a new indication for Zepbound in obstructive sleep apnea. Lilly’s 2024 revenue increased 32% to $45.04 billion, exceeding initial guidance by an impressive $4 billion. Adjusted earnings increased 106% to $12.99 per share. 

To meet rising global demand, Lilly plans to increase incretin drug production by 1.6 times in the first half of 2025 compared to the previous year. It also plans to conduct multiple Phase 3 readouts in 2025, which, if successful, the company believes will contribute to long-term growth. Furthermore, the acquisition of Morphic Therapeutics and Scorpion Therapeutics may strengthen its immunology and oncology portfolios.

Looking ahead, Lilly anticipates 2025 revenue between $58 billion and $61 billion, representing roughly 32% growth at the midpoint. The company intends to expand Mounjaro’s international launch, increase R&D investment, and commercialize Ebglyss, Jaypirca, Omvoh, and Kisunla more extensively. Adjusted earnings could rise by around 78%, to between $22.50 and $24 per share, in line with consensus expectations. 

Bottom Line on LLY Stock

Eli Lilly is not just capitalizing on the success of its blockbuster drugs, it is laying the groundwork for long-term, innovation-driven growth. With a strong late-stage pipeline, aggressive global expansion, and strong shareholder returns, Lilly is establishing itself as a dominant force in the future of healthcare.

Eli Lilly has received not only a “Buy” rating from Goldman Sachs, but also an overall “Strong Buy” rating on Wall Street. Of the 24 analysts who cover the stock, 20 rate it a “Strong Buy,” one a “Moderate Buy,” and three recommend a “Hold.” 

The average analyst price target of $1,019.43 suggests a 37% increase from current levels. Furthermore, the Street-high estimate of $1,190 implies that the stock could rally by up to 74% over the next year. This reflects analysts’ high confidence in the company’s ability to deliver long-term value to shareholders.