1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 100
Eli Lilly and Company (NYSE:LLY), founded in 1876 and headquartered in Indianapolis, Indiana, is a global pharmaceutical leader operating in 18 countries. The company specializes in developing innovative drugs for conditions such as diabetes, cancer, autoimmune disorders, and neurological diseases.
On November 1, Truist Securities adjusted its price target for Eli Lilly and Company (NYSE:LLY) to $1,029, slightly down from $1,033, while reaffirming a Buy rating on the stock. The update reflects the company’s strong performance amid sustained demand for type 2 diabetes (T2D) and obesity treatments. With obesity treatments reaching only about 4-5% of the market, Eli Lilly’s drug TZP is projected to drive growth, with sales forecasted at $12-13 billion for 2024, signaling substantial market potential.
Additionally, Eli Lilly and Company (NYSE:LLY) reported a robust 42% revenue increase in its third-quarter earnings, driven by diabetes and cancer drugs Mounjaro and Zepbound, which collectively brought in over $3 billion. Earnings per share rose significantly to $1.18, up from $0.10 a year earlier. The company has also raised its 2024 revenue guidance to $45.4-$46 billion, forecasting a 50% growth in the fourth quarter.
In Q2 2024, 100 hedge funds tracked by Insider Monkey held stakes in Eli Lilly and Company (NYSE:LLY), with Fisher Asset Management being the largest stakeholder, holding 4.88 million shares valued at $4.43 billion.
Here is what Baron Funds said about Eli Lilly and Company (NYSE:LLY) in its second-quarter 2024 investor letter.
“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.”
While we acknowledge the potential of LLY, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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