RBC Initiates Coverage of Eli Lilly with $1,250 Target, Cites Obesity Market Leadership
RBC Capital initiated coverage of Eli Lilly with an Outperform rating and $1,250 price target, citing its obesity franchise dominance through 2030 and undiscounted growth catalysts. A head-to-head trial showed Lilly’s orforglipron reduced blood sugar by 2.2% versus 1.4% for oral semaglutide and drove 8.9 kg weight loss versus 5 kg, though side effects prompted 10% treatment discontinuation.
1. Coverage Initiation with Outperform Rating
RBC Capital began coverage of Eli Lilly with an Outperform rating and a $1,250 price target, highlighting investor optimism and potential upside. The firm argued that consensus estimates undervalue Lilly’s future growth, pointing to transformative catalysts ahead that could justify a premium valuation.
2. Orforglipron vs Semaglutide Trial Results
In a direct comparison, Lilly’s experimental GLP-1 agonist orforglipron lowered blood sugar by 2.2% and induced an average 8.9 kg weight loss, outperforming oral semaglutide’s 1.4% sugar reduction and 5 kg weight loss. However, 58% of orforglipron patients experienced mild-to-moderate side effects versus 45% on semaglutide, and 10% discontinued treatment due to adverse events compared to 5%.
3. Obesity Franchise Outlook through 2030
RBC projects Lilly’s obesity portfolio will dominate the market through 2030, driving sustained revenue growth and supporting a push toward a $1 trillion market capitalization. The firm noted that elevated expectations create some nervousness, but believes long-term leadership and pipeline catalysts will unlock significant shareholder value.