Bank of America lifts Eli Lilly target on international obesity drug potential
The bank raised its price objective to $1,344, highlighting that non-US sales of obesity treatments could eventually surpass domestic revenue as the company prepares for the 2027 launch of its oral pill, Foundayo.
Bank of America has raised its price target for Eli Lilly to $1,344, citing the pharmaceutical giant’s robust second-quarter performance and the growing potential for international sales of its obesity drugs to eventually outpace US revenue. The upgrade follows a quarter where Eli Lilly reported revenue of $23.0 billion, a 48 per cent increase year-on-year, and adjusted earnings of $8.38 per share, significantly beating the $6.01 consensus. The bank applied an unchanged 28.5 times multiple to its updated 2027 underlying earnings estimate, reflecting the company’s faster expansion relative to peers.
The analyst firm highlighted a pivotal shift in the company’s growth dynamics, noting that GLP-1 sales in international obesity markets are now approaching parity with US sales. For years, the US drove almost all of Eli Lilly’s obesity revenue, but recent data shows Mounjaro, the company’s diabetes injection, growing 55 per cent in Europe, 30 per cent in Japan, and 93 per cent in China last quarter. Bank of America estimates that roughly 60 per cent of Foundayo’s peak sales will come from outside the US, as the company has filed for approval in more than 40 countries.
A key catalyst identified by the bank is the upcoming launch of the oral GLP-1 pill Foundayo in early 2027. While the drug’s US debut was modest, bringing in $98 million, analysts are looking past this initial figure to the larger international opportunity where untreated patient populations are significant. The oral formulation is expected to reach patients who are unwilling or unable to take weekly injections, a segment that injectable treatments have not fully addressed. Both Eli Lilly and rival Novo Nordisk have reported strong pent-up demand for oral options abroad, where injectables have faced supply constraints.
Domestically, the landscape is evolving with the launch of Medicare’s GLP-1 Bridge program on 1 July, which opened coverage to approximately 20 million eligible beneficiaries. Early feedback indicates smooth access, with most adoption coming from patients new to GLP-1 treatment. However, prices remain under pressure, with second-quarter US net sales for GLP-1 drugs averaging about $580 per prescription, a 15 per cent decline from a year earlier. Bank of America expects the blended US price to continue falling through the second half of 2026 as cheaper channels expand, though management maintains that volume growth is outpacing price declines.
Beyond current products, the bank pointed to a deep pipeline that extends Eli Lilly’s competitive lead. Retatrutide, a next-generation triple-hormone shot, posted weight loss results approaching bariatric surgery levels in Phase 3 trials, with a US filing planned for the first quarter of 2027. Additionally, Eloralintide, an amylin-based drug, was added to the bank’s model, underscoring the depth of the company’s research portfolio. Eli Lilly shares closed at $1,192.52 on 6 August, up 1.94 per cent on the day, trading near its 52-week high.
