“Let’s lay the stock more but slowly.”
Known only to those who know, Eli Lilly is gaining attention as the second Nvidia. With a more than 50% increase in stock price this year, it is considered a candidate for stock splitting following Nvidia.
Stock Price Nearing $900, Up 53% This Year
According to the New York Stock Exchange, as of June 30, Eli Lilly’s stock price is recording $905.38, a 52.88% increase from the beginning of the year which was $592.20. This is over three times the increase rate of 15.13% of the S&P 500 during the same period. The market capitalization reached $860.5 billion, going beyond twice the size of the Korean stock market leader Samsung Electronics.
Eli Lilly shows relatively low trading volume since the presence is unknown to Korean investors who are focusing on investing in artificial intelligence (AI) and semiconductor stocks. According to the Korea Securities Depository, the net purchase amount for Eli Lilly this year is $147.42 million, ranking 19th among foreign stock items. The stock price of Intel Corporation, which has a higher net purchase than Eli Lilly, has dropped 35.20% from $47.80 to $30.97 this year.
KCGI Asset Management has included Eli Lilly, excluding Tesla, in the KCGI US S&P 500 TOP10 Listed Index Fund (ETF) reflecting the market’s current stream.
As the stock price is nearing $900, the possibility of Eli Lilly’s stock splitting is being raised. Adria Cimino of the investment specialist media The Motley Fool analyzed, “The stock split clock is pointing to Eli Lilly next,” adding, “Consideration is required for the point that Eli Lilly has had four stock splits, and albeit the last split was a long time ago. After a significant increase in stock price, it was open to stock splitting.”
Obesity Treatment Followed By Alzheimer’s Treatment
There are also claims that the stock price has reached its peak. According to the global research company FactSet, Eli Lilly’s target stock price is $886.44, 2% lower than the current price. According to Korea Investment & Securities, Eli Lilly’s recent four-quarter price-earnings ratio (PER) and price-book ratio (PBR) are 127.4 times and 64.17 times, respectively which AbbVie’s 50.6 times, 37.63 times, or Amgen’s 43.5 times, 32.56 times.
However, the common view of the securities market is that the performance and stock price will continue to rise as the market dominance of obesity and diabetes treatments such as Jardiance is overwhelming and the progress of new treatments is outstanding.
Truist Securities recently raised Eli Lilly’s target stock price from $892 to $1,000, saying, “The demand for obesity treatment is continuous, which will help Eli Lilly’s obesity-related product pipeline,” emphasizing, “The unanimous approval of the drug use by the U.S. Food and Drug Administration (FDA) Advisory Committee for Lilly’s Donanemab, an Alzheimer’s treatment, suggests another success possibility.”
Senior Analyst Ha Heon Ho of Shinhan Investment Securities conveyed, “Eli Lilly’s Donanemab is expected to receive final approval from the FDA by the end of this year at the latest.”
Eli Lilly has decided to use generative AI in developing new antibiotics that can solve antibiotic resistance (AMR) in collaboration with OpenAI, famous for ChatGPT. Adam Spatacco of The Motley Fool emphasized, “If Eli Lilly starts making progress in AMR research, it may start using OpenAI in other areas,” adding, “In this case, Eli Lilly and OpenAI will have another opportunity.”
