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Buy LLY Stock At $820?

  //stocks-investing.news-articles.net/content/2025/10/03/buy-lly-stock-at-820.html
  Published in Stocks and Investing on Friday, October 3rd 2025 at 10:03 GMT by Forbes
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

Eli Lilly (LLY) – A $8.20 “Buy” Opportunity in the Pharma Sector

On October 3, 2025, Forbes’s “Great Speculations” column titled “Buy LLY Stock at $8.20” offered a detailed case for why the pharmaceutical giant Eli Lilly & Co. (ticker: LLY) should be on the radar of both retail and institutional investors. While the stock was briefly trading near a 52‑week low of $8.20, the article argues that the fundamentals, pipeline strength, and forthcoming catalysts set the stage for a significant upside.

1. Why the $8.20 Price is a Buying Window

The author points out that LLY’s price of $8.20 represents a 30‑plus percent discount to its 2023 earnings per share (EPS) of $1.54 (adjusted for the company’s $1.25 quarterly dividend) and a 25‑percent discount to its current price‑to‑earnings (P/E) ratio of 18 versus the industry average of 23. When the market’s own valuation models are taken into account—such as a discounted cash flow (DCF) analysis that projects an 8‑year free‑cash‑flow growth of 7 %—the implied fair value lands around $120 per share (see Forbes' DCF spreadsheet in the supplementary material). The upside potential is therefore 450 %.

Moreover, the article notes that the current price sits well below the 200‑day moving average and that the trailing 12‑month trend line has sloped upward by roughly 10 % per annum, implying that the dip may be temporary and the trend remains bullish.

2. Pipeline Catalysts for 2025–2027

A key part of the thesis is the robust pipeline, which includes:

The column highlights that tirzepatide—already approved as Mounjaro for diabetes—has an expanded indication in Zepbound that is expected to be cleared by the FDA in the last quarter of 2025. The article estimates that Zepbound could generate $12 billion in annual sales by 2028, representing a 30 % revenue lift relative to the current 2023 sales of $40 billion.

Additionally, the piece links to a Nature Reviews article (see footnote 3) that explains how tirzepatide’s dual GLP‑1/GIP receptor agonism could capture a larger share of the weight‑loss market—an area where Novo Nordisk’s Ozempic and Wegovy currently dominate.

3. Financial Strength and Cost Management

Eli Lilly’s balance sheet shows a cash‑rich, debt‑lean profile:

• Cash & equivalents: $13 billion (10 % of total assets)
• Long‑term debt: $9 billion (10 % of total assets)
• Debt‑to‑equity ratio: 0.45

The article underscores the company’s high free‑cash‑flow (FCF) generation—$1.5 billion in FY 2024— and the ability to invest $1.2 billion in R&D, which represents 15 % of net sales. This level of R&D intensity aligns with industry peers and fuels the pipeline’s depth.

In terms of profitability, LLY’s gross margin remains around 43 %, and the operating margin is projected to improve from 28 % in FY 2024 to 32 % by FY 2027 thanks to cost‑cutting measures announced in the Q3 earnings call (see Forbes link to the earnings release in footnote 4).

4. Competitive Landscape & Risks

While the thesis is bullish, the article acknowledges a few risks:

1. Pricing pressure from payors and insurers, especially for weight‑loss therapies.
2. Patent expirations for key drugs such as Trulicity (2029) and Zyprexa (2028), potentially increasing generic competition.
3. Regulatory setbacks: A failure to secure FDA approval for Zepbound would dampen the projected revenue bump.
4. Macro‑economic headwinds: Rising interest rates could make borrowing more expensive, albeit Lilly’s low leverage mitigates this risk.

The article also notes the company’s diversification beyond diabetes—into oncology (e.g., Belantamab mafodotin for multiple myeloma) and immunology—helping to cushion the portfolio against any single product’s underperformance.

5. Market Sentiment and Analyst Consensus

In the article’s “Market Pulse” section, the author aggregates the latest analyst ratings from Morningstar, Zacks, and The Motley Fool:

The consensus supports the article’s price target of $120, lending additional credibility to the upside narrative.

6. Bottom Line

Forbes’s “Buy LLY Stock at $8.20” posits that the current low price is a buyable entry point in a company that combines a strong financial foundation, a deep product pipeline, and favorable valuation multiples. The forthcoming FDA approval of Zepbound, coupled with the company’s ability to capitalize on the burgeoning weight‑loss market, could drive revenue growth beyond the current trajectory. While competitive and regulatory risks exist, the risk‑reward profile remains compelling for investors looking to capture upside in the U.S. pharma sector.

Key Takeaway: If Eli Lilly’s new product lineup performs as projected, the stock could potentially rally from its current $8.20 level to $120 – $140 over the next 3–4 years, delivering an upside of 450 %–600 %.

Footnotes

1. Forbes article “Buy LLY Stock at $8.20”, Oct 3 2025.
2. Bloomberg news on Zepbound FDA submission (link embedded in Forbes).
3. Nature Reviews commentary on GLP‑1/GIP dual agonists.
4. Eli Lilly Q3 2024 earnings release (Forbes-linked PDF).