Eli Lilly Stock Soars: Here’s the Real Reason Behind Today’s Surge

Big pharma just got a caffeine jolt—Eli Lilly shares are skyrocketing. What’s fueling the rally? Let’s break it down.

The Catalyst No One Saw Coming

Forget boring earnings beats—this move smells like a strategic masterstroke or desperate Hail Mary (depending who you ask).

Street vs. Reality

Analysts scramble to upgrade targets while retail traders pile in late—classic Wall Street theater. One thing’s clear: somebody’s printing money today.

Bottom Line

Whether this holds or crashes harder than a crypto meme coin, today’s action proves pharma remains the OG volatility play. Just don’t ask your portfolio manager about their lunchtime martinis.

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What Bernstein says about Lilly stock

Lilly stock got pummeled last week, falling 18% after reporting 38% revenue growth in its second-quarter report. It also reported that its new oral (pill) weight-loss drug orforglipron didn't cut patients' weight quite as much as the company had hoped it would. But according to Bernstein analyst Courtney Breen, this steep decline in stock price has created a "clear buying opportunity" for new investors, as she writes in a note on StreetInsider.com today.

Lilly beat on both sales and earnings last week, notes Breen, and investors' decision to sell off the stock on less-than-stellar orforglipron results "was overblown," subtracting almost $100 billion from Lilly's market capitalization. Tagging the new drug with an affectionate diminutive, Breen argues that "Orfo" can still play a "market expanding role" that will drive Lilly's already strong results even higher in future years.

Is Lilly stock a buy?

I think she's right about that. Consider:

Breen predicts that Lilly will earn $22.84 per share this year, and most analysts agree that the stock can grow earnings 32% or better over the next five years. To get a price/earnings-to-growth (PEG) ratio of 1.0, that WOULD therefore imply a fair value of $730 for Lilly stock -- and right now, Lilly stock costs only $640 and change!

At minimum, I'd therefore forecast 14% upside for Lilly stock today. Add in a modest 1% dividend yield, and that makes Lilly stock a buy in my book.