Morgan Stanley’s Best Stock Picks: 15 Stocks To Own For 2025

7. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders In Q2 2024: 100

Share Price Target Upside: 20%

Share Price Target: $1,106

Eli Lilly and Company (NYSE:LLY) is one of the hottest stocks these days due to its commanding presence in the weight loss drug market. The shares are up by 56% year to date, as investors continue to remain optimistic about its potential to lead the weight loss drug market. However, this market has rapidly evolved, and after the initial wave of products has made its mark, drug makers are now eager to expand their market share. This means that early movers like Eli Lilly and Company (NYSE:LLY) are under pressure to reduce prices to expand access. Additionally, as the first weight loss drugs were released in 2014, their patents are expiring which could flood the market with a slew of low cost generics. Consequently, Eli Lilly and Company (NYSE:LLY)’s hypothesis now depends on its ability to introduce newer weight loss drugs with higher efficacy and products that are competitively priced to ensure a commanding market share. Additionally, the firm’s considerable resources allow it to target other markets too, and the latest bit on this front is Eli Lilly and Company (NYSE:LLY)’s FDA approval for a skin disease treatment. Morgan Stanley is also aware of this potential, as it notes that “LLY has the most robust new product cycle (and hence growth) outlook in Pharma as the company could launch five new drugs over the next two years (across large end markets such as diabesity, Alzheimer’s disease, cancer and immunology).”

Baron Funds mentioned Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter. Here is what the fund said:

“In biopharmaceuticals, we remain bullish on the market opportunity for new diabetes and obesity medicines. In June at a medical meeting, the principal investigators of the SURMOUNT-OSA trial presented the full data which demonstrated that Eli Lilly and Company’s Tirzepatide reduced obstructive sleep apnea in adults with obesity by up to 62.8%, and up to 51.5% of participants met the criteria for disease resolution. This impressive data set paves the way for Tirzepatide to be used as a treatment for obstructive sleep apnea in overweight and obese individuals.”