Eli Lilly Pushes Tesla Off From the Magnificent 7 - But Can It Stay There?

investing.com:

In late January, Eli Lilly (NYSE:LLY) weight-loss drugs helped the Indianapolis-based drugmaker replace Tesla (NASDAQ:TSLA) from the Magnificent 7.

By the closing bell on Feb. 20, Eli Lilly's stock, despite a -3.38% dip, stood at $755.66 per share, boasting a market capitalization of nearly $680 billion.

Eli Lilly's surge was fueled by the success of its weight-loss drug Zepbound, which gained approval in November 2023.

This medication, known for its effectiveness in weight loss treatment, posed a direct challenge to Novo Nordisk (NYSE:NVO), Eli Lilly's primary competitor.

Novo Nordisk's weight-loss drug Wegovy catapulted the company to become Europe's top market cap leader at 505 billion euros, surpassing luxury giant LVMH.

Now, Eli Lilly and Novo Nordisk's respective weight-loss products are fiercely competing to gain market share worldwide.

Market experts at Morgan Stanley recently projected that Eli Lilly could be valued at over $900 billion, elevating the target price from $727 to $763 per share.

However, some analysts argue that Eli Lilly's potential is already factored into its current value.

To gauge the pharmaceutical company's target share price, one can turn to InvestingPro's tools.

InvestingPro's Fair Value, which consolidates 13 recognized financial models tailored to Eli Lilly's specific characteristics, stands at $559.39.

This value represents a 26 percent decrease from the stock's closing price on Feb. 20.

Source: InvestingPro

In recent weeks, InvestingPro subscribers have been tracking analysts' forecasts for Eli Lilly.

The average of 26 analysts surveyed by InvestingPro indicates a bearish forecast, setting the target price at $745.50 per share.

In essence, analysts' opinions and valuation models'