Wall Street's only bearish on Eli Lilly stock has changed its mind

HSBC, the latest bearish on Eli Lilly's pharmaceutical company, dropped its advice to sell its shares and upgraded its rating to a "hold" recommendation. The bank's analyst highlighted the success of trials of Eli Lilly's weight-loss pill, which confirmed its commercial potential. Now no one on Wall Street is advising investors to sell shares of the U.S. pharma giant, according to MarketWatch.

HSBC analyst Rajesh Kumar upgraded shares of Eli Lilly from Reduce (equivalent to "sell") to Hold, and raised the target price from $675 to $700, Seeking Alpha reports. That said, the new target is 5% below its last close on August 26.

Kumar, who until now was the only one in the market advising to sell the pharma company's securities, now said that the "bearish" scenario regarding it has already come true, MarketWatch writes. The analyst pointed to the success of the latest Phase 3 trial of Eli Lilly's weight-loss pill, orforglyprion. He said the test results showed that the new development has a clear commercial path to approval and sales in diabetes and obesity therapies. According to the study, orforglyprion provided weight loss of about 11% over 72 weeks at the maximum dose in adult patients who were obese or overweight and had type 2 diabetes.

HSBC also noted that sales forecasts for orforglyprion became more realistic after Wall Street was disappointed with data from a study of the same Lilly pill but among patients without diabetes. The company released them in early August, but the results didn't match high expectations, prompting Wall Street to revise its projections. While analysts previously thought Eli Lilly's revenue from the weight-loss pill would reach $20 billion in 2032, they are now talking about $15.5 billion, but HSBC says market expectations are actually even lower - about $10 billion a year at peak.

Kumar compared Lilly's development to a similar pill from Danish player Novo Nordisk, which makes Ozempic. "Overall, the profile of orforglyprion looks competitive compared to [Novo's weight loss pill] rubelsas for diabetes and obesity," the analyst said. He also praised Lilly's decision to raise prices outside the U.S., calling it a sign of discipline. If Novo Nordisk does the same, the aggregate market for weight loss drugs could meet the consensus forecast, he said.

At trades on August 27 shares of Eli Lilly jumped by 1.5% - up to $746.5. It became their maximum since August 6. Compared to the beginning of 2025, the market value of the company is now down 4.3%. For comparison: the main U.S. stock index S&P 500 for the same period, on the contrary, added more than 10%.

Quotes of Novo Nordisk at the end of trading in Copenhagen rose by 1.6%. However, since the beginning of the year, the market value of the Ozempic manufacturer has decreased by almost 43%.

Now no analysts who have assigned ratings to shares of Eli Lilly, do not advise investors to sell them, according to data from MarketWatch. 22 out of 28 analysts suggest buying these securities (Buy and Overweight ratings), the rest recommend holding (Hold),

The average target price is $912 per share of Eli Lilly stock, suggesting upside potential of another 24% from the August 26 closing level.

This article was AI-translated and verified by a human editor