The postelection drawdown in Eli Lilly may have been overblown as one close confidant to President-elect Donald Trump appears to support weight loss drugs, according to Bernstein. The pharmaceutical stock has fallen more than 6% from the election to Nov. 25, part of a drawdown that has pushed many names in the sector lower, the firm found. Eli Lilly shares also tumbled after Trump announced Robert F. Kennedy Jr., a noted skeptic of vaccines and well-known weight loss drug Ozempic , as his pick to lead the Department of Health and Human Services. But Bernstein analyst Courtney Breen said there have been two positive signals for Eli Lilly and GLP-1s, the blockbuster weight loss drug type that the company has emerged as a leader within. These show how the stock’s initial negative reaction to the election was “less justified” than it was for companies that are more focused on vaccines, she said. Breen has an outperform rating on Eli Lilly and price target of $1,100, which suggests upside of 38.2% from Wednesday’s close. Eli Lilly is behind the Mounjaro drug for diabetes and Zepbound for weight loss, among others. The first positive signal was a recent report of Eli Lilly CEO David Ricks’ attendance at a dinner with Trump and Kennedy, along with leaders from Pfizer and the Pharmaceutical Research and Manufacturers of America. Breen said this event underscores “an opportunity to collaborate directly with the new administration.” The second was an X post from Elon Musk , the Tesla CEO and notable Trump backer who the president-elect has tasked to lead a government efficiency initiative . In the post, Musk said, “Nothing would do more to improve the health, lifespan and quality of life for Americans” than making these drugs available at a “super low cost to the public.” “Nothing else is even close,” Musk added. “With Elon’s role in the new administration plus Lilly’s ability to bring creative solutions to the table for GLP1s … we see Lilly in a strong position to work creatively with the new administration to expand access” to these drugs, Breen said. LLY YTD mountain Eli Lilly, year to date Breen noted there is a potential trade-off on price as supply increases. However, she said Eli Lilly should be better positioned than Novo Nordisk to benefit in this political environment, given its faster scaling history and because it is headquartered within the U.S. Despite recent challenges, Eli Lilly shares are up more than 35% in 2024. That puts the stock on track for its eighth straight winning year.
