Bernstein SocGen Group has reiterated an Outperform rating on Eli Lilly (LLY) and kept a $1,300 price target on the stock after a competitor disclosed plans to lower list prices for GLP-1 drugs. The firm’s move follows Novo Nordisk's announcement that it will reduce list prices for its GLP-1 portfolio in January 2027 - a change Novo said came after a challenging trading day.
At the time of Bernstein's statement, Eli Lilly's market capitalization stood at $931 billion, and the shares were trading around $1,042, which InvestingPro data indicates is close to the company's Fair Value. Courtney Breen, the Bernstein analyst commenting on the matter, said the firm does not interpret Novo's list-price adjustment as the beginning of a price war.
Bernstein noted an important strategic option for Lilly: if Novo’s list price reduction alters patient share in the commercial market in 2027, Lilly can elect to match those list prices without additional impact to its business, according to the analyst. The firm also cautioned that Novo’s move is not a "silver bullet" for the Danish drugmaker, pointing to the White House agreement known as the Balance Model as providing a soft floor for pricing over the next three years.
Investor concern about escalation of price competition in the GLP-1 market has been a recurring theme, the firm said, but that backdrop has not prevented substantial recent upside in Lilly's shares. Over the last six months, Lilly returned roughly 50% to shareholders and reported revenue growth near 45% over the past twelve months.
The market reaction to Novo's pricing announcement has been accompanied by a flurry of coverage and regulatory and product-related developments for Lilly. The U.S. Food and Drug Administration approved a label expansion for Zepbound to allow a four-dose single-patient KwikPen device as an alternative to the existing single-dose vial. The KwikPen option will be available at the same self-pay price, beginning at $299 per month for the 2.5 mg dose.
On the analyst front, several firms have recently weighed in on Eli Lilly. RBC Capital initiated coverage with an Outperform rating, flagging Lilly’s leadership in the obesity franchise. Barclays began coverage with an Overweight rating, also citing Lilly’s strong position in obesity treatments. Bank of America Securities reiterated a Buy rating and stated that Novo Nordisk’s announced GLP-1 price cuts are unlikely to have a material effect on Lilly’s U.S. market.
Clinical trial results for competing products have also been cited in market commentary. Novo Nordisk’s obesity drug CagriSema reportedly failed to meet its primary endpoint in a trial, producing lower weight reduction versus Lilly’s tirzepatide, a comparison that has been referenced alongside pricing and market-share discussions.
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Key points
- Bernstein reaffirms an Outperform rating and $1,300 price target on Eli Lilly following Novo Nordisk's GLP-1 list-price reduction announcement.
- Bernstein does not view the pricing move as the start of a price war and highlights Lilly's option to match list prices without additional business impact if commercial patient share shifts.
- Recent analyst coverage and regulatory updates - including an FDA label expansion for Zepbound and new coverage from RBC, Barclays and BofA - accompany ongoing market focus on obesity and GLP-1 competition.
Risks and uncertainties
- Potential for price competition in the GLP-1 market - investors worry a price war could pressure revenues in the sector, affecting pharmaceutical and healthcare market dynamics.
- Regulatory and commercial shifts tied to pricing frameworks - the Balance Model is cited as a soft floor for pricing over the next three years, but changes in policy or participation could alter that buffer.
- Clinical trial outcomes for competing drugs - trial results, such as the reported failure of CagriSema to meet its primary endpoint relative to tirzepatide, can influence competitive positioning and investor expectations in the obesity-drug segment.
Conclusion
Bernstein's decision to maintain an Outperform rating and a $1,300 target on Eli Lilly underscores the firm's view that Novo Nordisk's announced list-price cuts do not necessarily inaugurate a sustained price war. The analyst position, combined with recent strong share performance and revenue growth at Lilly, frames the company's current market narrative as one where pricing actions by competitors are important but not decisive on their own. That said, investors remain attentive to pricing frameworks, regulatory agreements, and clinical outcomes as the GLP-1 and obesity-treatment markets evolve.