Eli Lilly Faces GLP-1 Competition, Overvalued at 51 P/E
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Market Sentiment Volatility: Despite Eli Lilly's (LLY) leading position in GLP-1 drugs, its P/E ratio has surged to 51, significantly higher than the S&P 500's 28, indicating potential over-optimism that could lead to a stock price correction.
- Increased Competition Risk: Novo Nordisk (NVO) has introduced an oral GLP-1 drug, appealing to consumer preferences for pills over injections, which poses a challenge to Eli Lilly's market dominance and could impact future revenues and market share.
- Alternative Drug Opportunities: Merck (MRK) and Bristol Myers Squibb (BMY) focus on cardiovascular and cancer treatments, and while currently underexposed to GLP-1 drugs, their P/E ratios of 14 and 18 suggest relative undervaluation, potentially attracting value investors.
- Patent Cliff Risks: Both Merck and Bristol Myers Squibb face upcoming patent expirations, yet their historical ability to innovate and develop new drugs suggests they can navigate short-term challenges and achieve long-term growth.
Analyst Views on BMY
Wall Street analysts forecast BMY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BMY is 55.86 USD with a low forecast of 37.00 USD and a high forecast of 68.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
8 Buy
11 Hold
1 Sell
Moderate Buy
Current: 54.940
Low
37.00
Averages
55.86
High
68.00
Current: 54.940
Low
37.00
Averages
55.86
High
68.00
About BMY
Bristol-Myers Squibb Company is a global biopharmaceutical company. It is engaged in the discovery, development and delivery of transformational medicines for patients facing serious diseases in areas: oncology, hematology, immunology, cardiovascular, neuroscience and other areas. Its growth portfolio includes Opdivo (nivolumab), Opdivo Qvantig (nivolumab and hyaluronidase-nvhy), Yervoy (ipilimumab), Reblozyl (luspatercept-aamt), Opdualag (nivolumab and relatlimab-rmbw), Breyanzi (lisocabtagene maraleucel), Camzyos (mavacamten), Zeposia (ozanimod), Abecma (idecabtagene vicleucel), and Sotyktu (deucravacitinib). Its other growth products include Onureg, Inrebic, and Empliciti. Its legacy portfolio includes Eliquis (apixaban), Revlimid (lenalidomide), Pomalyst/Imnovid (pomalidomide), Sprycel (dasatinib), and Abraxane (paclitaxel albumin-bound particles for injectable suspension). Opdivo (nivolumab) is a fully human monoclonal antibody that binds to the PD-1 on T and NKT cells.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
