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Eli Lilly stock bounced back on Friday after Thursday’s sharp dip as analysts ran to the drugmaker’s defense. The news Lilly shares were up more than 4% on Friday after tumbling nearly 12% on Thursday to close at $794.10 each. JPMorgan analysts said that Thursday’s sell-off was a market overreaction. The drop came off news of CVS Health ‘s decision to make Novo Nordisk ‘s Wegovy its preferred formulary agent over Eli Lilly’s Zepbound, starting July 1. The move raised fears of a price war in the GLP-1 obesity drug market, a view that JPMorgan analysts disagreed with. “We do not see the CVS announcement as portending an acceleration in price declines across the space,” analysts said in a note to clients Thursday. According to JPMorgan, Eli Lilly should continue to “see share gains relative to Wegovy in the broader obesity space,” which should maintain a healthy growth trajectory. The analysts kept their overweight buy rating and a price target of $1,100 per share. Analysts at Leerink said that the stock’s weakness represents a buying opportunity, but noted that Eli Lilly downplayed the impact of the CVS-Novo partnership. Big picture Unfortunately, the news overshadowed Eli Lilly’s solid earnings beat . The company reported better-than-expected first-quarter results for its GLP-1 franchise, made up of diabetes and obesity drugs. Revenue rose 45% to $12.7 billion, beating Street estimates. The company’s earnings per share also came in ahead of expectations at $3.34. Lilly CEO David Ricks said the company plans to innovate with better medicines as it navigates the CVS update. The Club stock surged in April on the success of its late-stage trial for its oral daily pill for weight loss and type 2 diabetes treatment called oforglipron. This gave Eli Lilly a big lead as Pfizer announced it was discontinuing development of its oral weight loss drug due to a potentially drug-induced patient liver injury. Lilly also appears to be actively thinking about the implications of pending tariff announcements by President Donald Trump . Ricks offered to help “respond” to national security concerns related to biopharma imports into the United States. Bottom line The Club agrees with analysts that the CVS–Novo impact to Zepbound won’t be as bad as what the market sell-off on Thursday indicated. “I reiterate that I like it,” said Jim Cramer. We’re optimistic about the oral drug’s approval due to rising demand, as most people prefer pills over shots. Shares are currently trading around the low $800s. We last added to our position in January with a purchase of 10 shares at roughly $729 each. (Jim Cramer’s Charitable Trust is long LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
This picture shows an unit dedicated to the production of insulin pens at the factory of the US pharmaceutical company Eli Lilly in Fegersheim, eastern France.
Frederick Florin | AFP | Getty Images
Eli Lilly stock bounced back on Friday after Thursday’s sharp dip as analysts ran to the drugmaker’s defense.
