Bank of America reiterated a Buy rating on Eli Lilly & Co. (NYSE:LLY) and raised their 12-month price target on the stock to $500.00 (From $450.00) following a proprietary consumer analysis conducted to examine the escalating hype surrounding new obesity medications.
Bank of America analyzed >1,100 U.S. consumers' responses to assess weight loss therapeutics current demand, uptake, and treatment limitations to get a directional sense of interest.
The analysts also examined the ever-changing world of social media trends, specifically focusing on the weight management scene. Their goal was to understand what potential customers were talking about and how prices affected their choices.
The study found that >55% heard about these therapeutics on some form of social media, suggesting the need for targeted advertising. Lilly launched the first direct-to-consumer campaign for Mounjaro in T2D in 1Q, and Bank of America expects increased interest for Mounjaro as patients become familiar with the benefits.
BofA analysts wrote in a note, “In our analysis, it seems consumers are most interested in Lilly’s Trulicity / Novo’s Ozempic (covered by Jain/ Parry) for weight loss, which we’d attribute primarily to the new nature of Mounjaro / Wegovy. But ultimately, we don’t expect obesity will be a zero-sum game; in fact, we suspect with multiple big players (e.g., Lilly, Novo, Pfizer and others) we will likely see more rapid improvements to reimbursement and competitive pricing pressure, which should lead to faster uptake.”
Bank of America increased revenue forecasts for Mounjaro in Type 2 diabetes by an average 19% for ’23-’30. They also increased forecasts for tirzepatide in obesity by an average 40% for ’23-’30.
Shares of LLY are up 0.51% in mid-day trading on Wednesday.