Barclays on Thursday opened coverage of Eli Lilly and Company with an overweight rating and set a price target of $1,350, citing the drugmaker’s prominent position in the obesity treatment market driven by GLP-1 therapies.
The investment bank characterized Lilly’s GLP-1 portfolio as marking a structural change in how obesity is treated, shifting the emphasis from conventional diet and exercise toward medical therapy. Barclays said it expects Lilly to remain the market leader in this category.
Barclays acknowledged that Eli Lilly trades at a considerable premium relative to the broader pharmaceutical sector, but argued the valuation is warranted by the company’s leadership. The bank emphasized this point in its initiation, stating: "Sometimes it’s best to keep it simple and stick with a category leader, so whilst valuation is at a significant premium to the broader space, we think with LLY it’s worth it and initiate coverage with an OW rating."
The stock’s valuation metrics cited in the analysis include a price-to-earnings ratio of 44.47 and a PEG ratio of 0.46, the latter suggesting the stock is trading at a low price relative to near-term earnings growth. Eli Lilly carries a market capitalization of $914 billion and reported revenue growth of 44.7% over the most recent twelve months. On a shorter horizon, the shares have returned 45.5% over the past six months.
Separately, InvestingPro analysis referenced in the coverage indicates the stock appears slightly undervalued based on a Fair Value assessment, and points to expanded research resources available to subscribers for deeper company analysis.
Alongside Barclays’ initiation, the company has reported several clinical and corporate developments which feature in current analyst sentiment. In clinical news, Eli Lilly said its inflammatory bowel disease therapy Omvoh showed sustained efficacy through three years in adults with moderately to severely active Crohn’s disease. The Phase 3 VIVID-2 open-label extension study found that more than 90% of patients who achieved steroid-free remission at one year maintained that remission through three years of treatment.
Additionally, Eli Lilly reported results from a study of the combination of Taltz and Zepbound in moderate-to-severe plaque psoriasis. The company said the combination outperformed Taltz alone, with 27.1% of participants achieving complete skin clearance and also experiencing significant weight loss after 36 weeks.
On the manufacturing front, Eli Lilly is planning a $1 billion investment in India intended to position the country as a hub for global drug exports.
Analyst activity beyond Barclays has also reflected constructive views. Freedom Capital Markets upgraded Eli Lilly’s rating to Buy and raised its price target to $1,200, citing a strong growth outlook. UBS retained a Buy rating with a $1,250 price target, noting confidence in the company’s oral weight-loss candidate orforglipron and projecting revenue of $83.2 billion in 2026.
Collectively, these analyst actions, the results from ongoing clinical programs, and the planned manufacturing investment form the backdrop to Barclays’ decision to commence coverage with an overweight stance and a $1,350 target.
Investors tracking Eli Lilly will likely weigh the company’s market-leading position in obesity treatments and recent operational developments against its premium valuation metrics as they assess the stock’s outlook.