LLY - El Lilly surpasses Tesla's market size: why has the biotech stock become so attractive?
2024-01-26 06:46:53 ET
Barely four years ago, El Lilly (NYSE:LLY) was trading at just around $130. Fast forward, the stock trades at a whopping $627, having recently rubbed a new record price above $645. That represents a price increase of nearly 400%. The return in the past year is also quite impressive at 80%. And guess what? El Lilly is now more valuable than EV giant Tesla Inc (NASDAQ:TSLA).
Boasting a market cap of $595.80 billion, El Lilly is undeniably a rising giant in the stock market. Thanks to Tesla’s recent declines in price, El Lilly value is higher than the EV maker’s $581 billion. But is the riddance of one of the best biotech stocks likely to continue in 2024?
The attractiveness of El Lilly to investors has been out of question. At least, the recent stock price movement can confirm this. Analysts also remain upbeat on the company. Goldman Sachs expects the stock to soar by 140% by 2028, helped by increased demand for its GLP-1 drugs.
Just as good as the ratings, El Lilly has been making strong statements in the market. The stock cemented its robust gains in 2023 as the “Ozempic craze” fueled demand for its weight loss drugs. Of course, El Lilly is crafting a niche, with predictions the obesity market will be a big business in 2024.
Conversely, El Lilly is positioning itself for the future. In November 2023, the FDA approved the company’s obesity drug tirzepatide. In December, it announced positive results for patients administered its weight-loss drug Zepbound. The company’s obesity drug, Wegovy, has also been found to reduce the risks of cardiovascular attacks.
El Lilly is testing various other drugs and recently acquired Versanis Bio to strengthen its drug portfolio. The results of these drug developments will definitely pay off in years to come. For billionaire investor Ken Langone , El Lilly could be the first trillion-dollar drug company.
El Lilly technical analysis
From a technical investment perspective, El Lilly trades at or close to the overbought zone. The stock has stubbornly stayed in the buying zone for a while, rarely falling below the RSI midpoint of 50. The momentum is strongly bullish.
Should you invest in El Lilly?
El Lilly ticks the boxes of an attractive growth stock. The company’s product portfolio is exciting, underlined by a demand for its weight loss drugs. While the fundamentals are robust for the stock, the current price level is suspect. The stock could become more attractive after a correction phase.
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