10 Best Healthcare Stocks To Buy According to Hedge Funds

3. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 100 

Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical giant that develops, manufactures, and sells a wide range of medications. At its core, Lilly creates and distributes drugs to treat various medical conditions, with a particular focus on diabetes, oncology, immunology, and neuroscience.

Zepbound and Mounjaro, two medications from Eli Lilly and Company (NYSE:LLY), have been approved to treat obesity and type 2 diabetes, respectively, and are anticipated to bolster the company’s present revenue base. Tirzepatide is the same active ingredient in both therapies. Zepbound brought in $1.2 billion and Mounjaro about $3.1 billion respectively in the second quarter, establishing them as the two best-selling medications. By 2029, analysts project a $50 billion increase in medicine sales.

As of Q2 2024, a 100 hedge fund holders from those we tracked held stakes in the stock with Fisher Asset Management being the largest stakeholder from these, owning nearly 5 million shares. Analysts are also bullish on LLY giving it a Strong Buy rating. Over the last 3 months, 20 Wall Street analysts set an average 12-month price target of $1,042.88 for Eli Lilly, with a high of $1,150.00 and a low of $856.00, reflecting a 13.17% increase from the current price of $921.49.

The following is what Baron Health Care Fund stated regarding Eli Lilly and Company (NYSE:LLY) in its investor letter for the second quarter of 2024.

“ Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next-generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become the standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”