Eli Lilly Shares Rise 2.35% After Jefferies Raises Price Target to $1,700

Eli Lilly and Company (NYSE:LLY) shares advanced 2.35% to $1,385.56 in premarket trading on Monday after Jefferies increased its price target for the pharmaceutical company to $1,700 from $1,610.

The revised target represents an increase of approximately 5.6% and, according to Jefferies, is the highest price target among Wall Street analysts covering Eli Lilly.

The investment firm cited the potential size of international obesity treatment markets and the company’s GLP-1 drug portfolio as factors supporting its revised valuation.

Jefferies Identifies International Obesity Market Potential

Jefferies said its analysis suggests that the long-term market for obesity treatments outside the United States could be at least as large as the domestic market.

The firm estimates that the addressable patient population internationally could be approximately twice the size of the US market, reflecting the larger combined population of affluent consumers outside the country.

According to Jefferies, international demand may develop differently from the US market, with adoption influenced by patient preferences, treatment characteristics and pricing.

The firm acknowledged that adoption outside the United States is likely to take longer than domestically.

Pricing and Product Portfolio Support Analyst Outlook

Jefferies identified several factors that could influence Eli Lilly’s future performance in the obesity treatment market.

These include potentially higher realised prices as patients move to higher medication doses, improved international profit margins, favourable economics associated with oral treatments and the company’s range of obesity therapies.

The firm also challenged the assumption that GLP-1 medications will compete primarily on price.

“We think the key misconception is that GLP-1s behave like commodities, and ex.US is simply a lower-priced version of the US market. Instead, we believe obesity is increasingly a consumer-driven market, where patients differentiate treatments based on efficacy, tolerability, convenience and price,” Jefferies stated.

International Expansion Remains Central to Valuation

Jefferies said Eli Lilly may not need substantial price reductions in every international market to generate demand for obesity treatments.

The firm’s assessment suggests that differences in treatment effectiveness, tolerability and convenience could influence purchasing decisions alongside affordability.

However, Jefferies expects international market development to progress more gradually than in the United States.

The revised $1,700 price target reflects the investment firm’s expectations for Eli Lilly’s long-term growth opportunities rather than a guaranteed future share price.

Eli Lilly stock price