5. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Investors: 100
Market Capitalization: 861.2B
Jim Cramer recently discussed his approach to evaluating stocks, noting that he currently favors Eli Lilly and Company (NYSE:LLY) over Bristol Myers Squibb Company (NYSE:BMY) due to Eli Lilly’s strong growth prospects, which make its high price-to-earnings ratio less concerning.
“When I look at companies, I might favor Eli Lilly over Bristol, considering the growth rate makes me less concerned about the price-to-earnings ratio. But then Jeff brings me back to earth, reminding me that sometimes a sky-high price-to-earnings ratio can create problems. In the end, we must trust and do what’s right. You can’t become complacent with any stock, even one like Eli Lilly, which I think has the biggest pharmaceutical potential.
I’ve mentioned it twice now, but it’s just on my mind. We could easily become the Eli Lilly fund if it becomes dominant, or the Apple fund if it becomes dominant. What we try to do at all times is avoid swinging from one stock to another, which is why we sometimes recommend trimming.”
In Q2 2024, Eli Lilly and Company (NYSE:LLY) reported strong earnings of $3.92 per share, significantly higher than the $2.64 expected, and revenue of $11.3 billion, exceeding the forecast of $9.83 billion. This impressive performance was driven by successful new drug launches and solid sales across key product lines. Looking ahead, Eli Lilly and Company (NYSE:LLY) is poised for substantial growth, supported by a promising drug pipeline, especially in diabetes and obesity treatments, which are anticipated to boost revenue in the future.
Eli Lilly and Company (NYSE:LLY) has updated its FY 2024 guidance to project earnings per share between $16.10 and $16.60 and revenue between $45.4 billion and $46.6 billion, indicating strong confidence in its continued market expansion. Eli Lilly and Company (NYSE:LLY)’s stock has surged by 64% this year, reflecting strong investor confidence. Eli Lilly and Company (NYSE:LLY)’s strategic acquisitions and partnerships, particularly in oncology and immunology, have strengthened its market position.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 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 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.”
