Eli Lilly’s first-quarter report gave Wall Street another reason to stay optimistic about one of the market’s biggest pharmaceutical winners, even as analysts continue to weigh how much growth is already priced into the stock.
Bank of America reiterated its Buy rating on Eli Lilly and set a $1,133 price objective on the stock, according to a report given to TheStreet. That target was lowered from $1,294, but still implied roughly 21% upside from the share price listed in the firm’s report.
The update captured the main debate around Eli Lilly. The company continues to post strong results behind its diabetes and obesity treatments, while investors are still trying to gauge how durable GLP-1 pricing and market share can be over the next several years.
BofA said Eli Lilly delivered a “solid” first quarter, with sales and earnings per share beating consensus expectations by 11% and 24%, respectively. The company also raised its fiscal 2026 sales guidance by 2.5%, with the firm pointing to continued strength in GLP-1 demand outside the U.S.
BofA says Eli Lilly’s obesity ramp remains strong
The largest driver of BofA’s bullish view remains Eli Lilly’s position in the fast-growing obesity market, where the firm sees the company holding a strong competitive position for years.
According to the report given to TheStreet, BofA said Lilly’s GLP-1 ramp outside the U.S. continues to exceed both its own expectations and Wall Street’s. The firm pointed to Mounjaro’s performance outside the U.S. as another strong piece of the quarter, while also noting that prescriptions for Lilly’s oral GLP-1, Foundayou, were beginning to pick up.
BofA said one of the key takeaways from the quarter was that oral GLP-1 drugs do not appear to be cannibalizing injectables. That is an important part of the firm’s long-term view, because Lilly’s opportunity depends on expanding the market without meaningfully undercutting demand for its existing products.
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The firm also highlighted early commercial details from Lilly’s conference call, including management’s comment that Foundayou had more than 20,000 treated patients through its first 3.5 weeks. BofA noted that Lilly expects access from two of three major pharmacy benefit managers by mid-May, with Medicare Part D access expected later.
Mounjaro also remained a major focus. BofA said the drug continues to track roughly 75% chronic weight management compared with type 2 diabetes, while growth outside the U.S. has remained solid across several key markets, including Brazil, the U.K., China, and Korea.
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The price target cut reflects valuation discipline
The firm’s lower price objective does not signal a major change in its view of Lilly’s growth story. It reflects a more tempered valuation approach after a large move in the stock and rising questions around long-term GLP-1 pricing.
BofA lowered the multiple it uses to value Lilly to 25x from 30x its 2027 underlying earnings estimate. The firm said the adjustment better reflects Lilly’s expected seven-year sales compound annual growth rate and accounts for longer-term uncertainty around the GLP-1 market.
Even with the lower multiple, BofA raised its earnings estimates. The firm increased its 2026 EPS estimate to $35.93 from $33.70, its 2027 estimate to $45.34 from $43.12, and its 2028 estimate to $53.67 from $51.97, according to the report.
The firm also sees revenue continuing to climb sharply over the next several years. BofA’s model projects sales of $84.7 billion in 2026, $97.4 billion in 2027, and $110.6 billion in 2028, with adjusted net income rising alongside that growth.
Eli Lilly’s growth outlook remains the central story
BofA’s investment rationale is centered on Lilly’s potential for outsized growth across the next decade, with the GLP-1 obesity category serving as the biggest driver.
The report said Lilly is one of two leading companies likely to control most of the category for an extended period, helped by what BofA described as multiple competitive advantages. The firm also said the rest of Lilly’s business remains in good shape across oncology, immunology, and Alzheimer’s disease.
The scale of the GLP-1 opportunity remains the key reason BofA is willing to stay constructive on the stock, even with a lower target. The firm said obesity category sales could eventually reach $100 billion or more, based on its estimates.
There are still risks around that outlook. BofA listed several downside risks, including a potential safety issue tied to tirzepatide, stronger-than-expected competition, disappointing late-stage results for next-generation obesity products, or a broader change in the size of the obesity market opportunity.
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