Eli Lilly vies to join $1trn stock market club with Zepbound weight loss drug 

Eli Lilly’s market capitalisation is at $719bn, placing it among the 10 most valuable companies in the S&P 500 Index in the US.

Eli Lilly's relentless stock records have Morgan Stanley analysts musing whether it will become the first US company outside of the "Magnificent Seven" to reach a market value of $1trn. 

The analysts lifted their price target on the weight-loss drugmaker to the highest on Friday, to a level that would take the market capitalisation to about $900bn (€836bn). 

The company’s blockbuster diabetes drug Mounjaro is commonly used off-label for weight loss, while Zepbound, which was recently approved for weight loss, is predicted to become the best-selling drug in history. 

Shares in rival European maker Novo Nordisk have gained 72% in the past 12 months and is now the biggest publicly traded company in Europe with a market value of more than $540bn thanks to its Wegovy weight loss drug. 

“Could Lilly be the first $1trn biopharma stock?” Morgan Stanley’s Terence Flynn and colleagues asked in a research note to clients. “We continue to see a path for further upside.” 

The share stock has already jumped 30% this year, bolstered by demand for its Mounjaro and Zepbound drugs for diabetes and obesity. That’s taken Lilly’s market capitalisation to $719bn, placing it among the 10 most valuable companies in the S&P 500 Index in the US.

Lilly’s market value overtook that of Tesla last month following disappointing earnings and growth concerns for the electric car maker, which reached the $1trn mark in 2021 but has since fallen out of that select group. 

The $1trn-plus club now consists of Microsoft, Apple, Nvidia, Google-owner Alphabet, Amazon, and Meta Platforms. The only non-tech company with a higher market cap than Lilly is Berkshire Hathaway.

Several analysts boosted their price targets on Lilly this month following upbeat earnings results, including those at Societe Generale, Jefferies and Barclays. Some, however, appear to be betting that the optimism has already been priced. 

Bloomberg