Eli Lilly's Non-GLP-1 Pipeline Undervalued: Bernstein Upgrades to Buy with $1,400 Price Target
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Berenberg upgraded Eli Lilly from hold to buy with a $1,400 price target — not because of GLP-1 obesity drugs alone, but because the market is underpricing Lilly's pipeline beyond obesity and its roughly $60 billion in deal commitments.
The stock is up nearly 300% — why upgrade now?
Lilly's shares have rallied nearly 300% since its first GLP-1 approval, pushing its market cap past $1 trillion.
Analyst Kerry Holford argues the market has priced in Lilly's obesity-drug dominance but still underestimates its R&D efficiency, pipeline breadth, and non-obesity businesses.
This means → the upgrade isn't chasing GLP-1 momentum — it's a bet the market hasn't yet seen Lilly's "second growth curve."
Can the core GLP-1 business still grow from here?
Lilly's Mounjaro (for type 2 diabetes) and Zepbound (for obesity) are the current growth engines. Zepbound's prescriptions have overtaken Novo Nordisk's Wegovy, making it the most-prescribed weight-management drug in the U.S.
Oral GLP-1 drug Foundayo is awaiting regulatory approval for diabetes. Holford expects it to "unlock meaningful demand" once cleared.
In plain terms = the injectable is already a blockbuster; an oral version would bring in patients who won't take a needle — expanding the addressable market another notch.
Is the non-obesity pipeline the real valuation gap?
Holford points out that Lilly's truly underpriced asset is the R&D pipeline outside obesity.
This year alone, Lilly committed roughly $60 billion across more than 25 deals, including: up to $7.8 billion for sleep-disorder developer Centessa, up to $7 billion for oncology firm Kelonia, and $3.8 billion for psychedelic-drug developer AtaiBeckley.
This means → cash generated by GLP-1 drugs is being redeployed at scale into new therapeutic areas. Lilly is evolving from "an obesity-drug company" into a multi-pipeline innovation platform.
A 26× forward P/E — is it too expensive?
Lilly trades at roughly 26× forward earnings (forward P/E — a valuation multiple based on projected future profits), above S&P 500 pharma peers and higher than five of the "Magnificent Seven" tech giants.
Holford believes Lilly's R&D efficiency and pipeline potential justify the premium.
This reflects a market that is pricing Lilly less like a pharma company and more like a tech-style growth story — the key variable ahead is whether the non-GLP-1 pipeline delivers enough to keep that valuation standing.
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