We recently published a list of 8 Best Robinhood Stocks to Buy According to Analysts. In this article, we are going to take a look at where Eli Lilly and Company (NYSE:LLY) stands against other best Robinhood stocks to buy according to analysts.
Morgan Stanley Wealth Management has announced quarterly retail investor pulse survey results. The majority of investors’ views were bullish. Investors began the year on the bullish (58%) note, in line with last quarter (59%). Furthermore, the results also revealed that around 2 out of 3 investors (64%) saw the market rising by the end of the quarter.
What’s On Retail Investors’ Minds?
Morgan Stanley Wealth Management’s survey revealed that inflation has been the top worry for investors’ portfolios at 45%, almost in line with the last quarter at 46%, with market volatility at 24% coming out to be the second. Notably, the concerns related to the new administration declined 13 percentage points since the last quarter. Furthermore, around 3 out of 5 (59%) of investors see that the broader US economy remains healthy. Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley, stated that with any new administration taking power, the potential policy changes can bring uncertainty in the broader markets. That being said, investors are optimistic and resilient amid a soft start to the new year.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Current Trends in Retail Investing
Retail outflows from the US equities increased to ~$4 billion over the previous 2 weeks due to the uncertainties related to tariffs and increased economic concerns, which resulted in a strong pullback in the S&P 500, reported CNBC, while quoting data from Barclays. Rob Austin, director of research at Alight Solutions, says that if people tried to buy the dip, there would have been evidence hinting at the increased buying of the large-cap equities. On the contrary, people are selling large-cap equities. Austin believes that this seems to be a bit of a reactionary trading activity.
CNBC, while highlighting the comments made by Venu Krishna (Barclays head of U.S. equity strategy), reported that there remains sufficient capacity for the retail investors to further disengage from the broader equity market. Notably, Barclays’ proprietary euphoria indicator exhibited that the sentiments are down to the levels that were seen around the time of the US election back in November, but remain elevated by historic standards. The increased sell-off came as American households remained more sensitive than ever to the significant volatility in the broader equity markets.
Our Methodology
To list the 8 Best Robinhood Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist the stocks trending on Robinhood. We also took help from the Robinhood Investor Index. Next, we chose the ones that analysts see significant upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of March 17. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A scientist in a lab running tests on a variety of biopharmaceuticals.
Eli Lilly and Company (NYSE:LLY)
Average Upside Potential: ~23.4%
Number of Hedge Fund Holders: 115
Eli Lilly and Company (NYSE:LLY) discovers, develops, and markets human pharmaceuticals. Moody’s Ratings believes that the company has healthy scale and solid competitive position, higher profit margins, and strong cash flow. Furthermore, rapidly growing products such as Mounjaro, Zepbound, Verzenio, Ebglyss, and Kisunla, are expected to sustain strong growth. The firm expects Eli Lilly and Company (NYSE:LLY) to maintain conservative financial policies over time. Analyst Nico Chen from DBS maintained a “Buy” rating on the company’s stock, keeping the price objective at $900.00. The rating is backed by a combination of factors demonstrating its promising growth prospects. One critical reason is its strong pipeline.
Furthermore, the analyst lauded Eli Lilly and Company (NYSE:LLY)’s existing products in the weight-loss segment, like Mounjaro and Zepbound, which have contributed significantly to its revenue. For Q4 2024, worldwide Mounjaro revenue rose 60% to $3.53 billion and the U.S. Zepbound revenue came in at $1.91 billion against $175.8 million in Q4 2023. Also, the healthy market performance of such drugs was strengthened by the clinical superiority over the competitors, says the analyst. Elsewhere, Citi maintained a “Buy” rating with a price objective of $1,190.00.
Parnassus Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Eli Lilly and Company (NYSE:LLY)stock declined following worse-than-expected third quarter results for its weight-loss drug segment. We initiated our position partway through the quarter, after the drawdown and in time for a partial rebound, and our average underweight for the quarter led to a relative contribution.
In the Health Care sector, we added drugmaker Eli Lilly, which has an exceptional GLP-1 franchise and a strong track record of innovation, which position the company for long-term growth. A rare revenue miss and President-elect Trump’s health secretary nomination sparked a sell-off, providing a window of opportunity to gain exposure to the drugmaker’s attractive product suite and pipeline at an attractive valuation.”
Overall, LLY ranks 5th on our list of best Robinhood stocks to buy according to analysts. While we acknowledge the potential of LLY as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued 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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Disclosure: None. This article is originally published at Insider Monkey.