Deutsche Bank calls Eli Lilly a ‘high growth unicorn’ in upgrade to Buy

Eli Lilly (NYSE:LLY) was in the spotlight on Monday after Deutsche Bank raised its recommendation on the stock to Buy from Hold, calling the drugmaker a “high growth unicorn” following its Q2 beat-and-raise results.

The Indiana-based drugmaker raised its full-year outlook above consensus as its weight loss products exceeded expectations. In addition to its GLP-1 agonists Mounjaro and Zepbound, indicated for diabetes and weight loss, breast cancer therapy Verzenio led to revenue growth, the company said.

In the upgrade note, DB analyst James said the earnings beat “helped settle some nerves in a volatile macro backdrop,” with the stock set to outperform for its “high growth outlook and low beta.”

Mounjaro’s sales outside the US is set to create a new large revenue base to help drive and sustain outsized growth. Sales from the blockbuster drug reached $3.1B, marking a threefold rise from the prior year quarter and exceeding ~$2.4B in the consensus, according to Bloomberg data. Its recently launched sister drug, Zepbound, added $1.2B to the topline compared to $818.9M in the consensus.

Shin sees competition expanding beyond Novo Nordisk (NVO), with ZEAL, VKTX, GPCR and Roche (OTCQX:RHHBY), whose oral GLP-1 candidate was identified as the biggest commercial threat.

Seeking Alpha’s quant system rates the drugmaker as Hold.