RBC Capital Initiates Eli Lilly (LLY), Cites Long-Term Leadership in Obesity Market

Eli Lilly and Company (NYSE:LLY) is included among the 14 Best GARP Stocks to Buy According to Analysts.

On February 25, RBC Capital initiated coverage of Eli Lilly and Company (NYSE:LLY) with an Outperform rating and a $1,250 price target. The firm said Lilly’s obesity franchise is positioned to dominate the market through 2030. The analyst noted that investor sentiment remains broadly positive. At the same time, there “remains some nervousness on elevated expectations” as the company approaches a $1 trillion market value. RBC added that current consensus estimates “materially undervalue” Lilly’s future growth potential, particularly given what it described as “transformative catalysts on the horizon.”

A recent Reuters report said Lilly’s experimental weight-loss pill, orforglipron, showed stronger effectiveness but also more side effects compared with Novo Nordisk’s oral semaglutide, Rybelsus, in a head-to-head diabetes trial. About 58% of patients taking the 36 mg dose of orforglipron reported mild-to-moderate side effects. This compares with 45% of patients taking the 14 mg dose of Rybelsus. Around 10% of patients taking orforglipron stopped treatment due to side effects, compared with 5% for Rybelsus. The drug was also associated with an increase in pulse rate.

Despite this, orforglipron delivered stronger results in controlling blood sugar and reducing weight. It lowered blood sugar levels by 2.2%, compared with 1.4% for Rybelsus. Patients taking orforglipron lost an average of 8.9 kg, while those on Rybelsus lost about 5 kg. Both treatments work by mimicking the GLP-1 hormone, which helps regulate appetite and blood sugar levels. Lilly said patients may accept the higher rate of side effects because of the greater improvements in blood sugar control and weight loss.

Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company that focuses on discovering, developing, manufacturing, and marketing medicines for human health.