Is Eli Lilly Stock Outperforming the Dow?

Indianapolis, Indiana-based Eli Lilly and Company (LLY) discovers, develops, manufactures, and markets human pharmaceutical products in the United States and internationally. The company has a market cap of $1.1 trillion and offers cardiometabolic health products, including Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, and more.

Companies with a market cap of $200 billion or more are typically referred to as “mega-cap stocks.” LLY fits squarely into that category, with its market cap exceeding this threshold and reflecting its substantial size and influence in the general drug manufacturers industry. 

However, LLY stock is down 9% from its 52-week high of $1292.65 touched on Aug. 19. Moreover, LLY has grown 8.6% over the past three months and has rallied the Dow Jones Industrial Average ($DOWI), which rose 5.8% during the same period.  

Zooming out a little further, the scenario remains the same. Over the past 52 weeks, LLY has surged 60.2%, outpacing DOWI’s 17.6% gain.           

LLY has been trading above its 200-day moving average since the end of April, indicating long-term bullish momentum, but below its 50-day moving average since the last trading session.

On Aug. 18, LLY stock rose 3.6% following its acquisition of rights to a preclinical Alzheimer's drug, and also entering a collaboration for an ion channel program. The company acquired global rights to AlzeCure Pharma's Alzheimer's drug candidate, ACD680, for an upfront payment of $10 million, with an expected $1 billion in total value through future development and commercial milestone payments. Additionally, LLY also entered into a global collaboration with OmniAb for a new ion channel program. Both these developments enable LLY to strengthen its early-stage pipeline with high-upside assets while fully protecting its near-term margins. 

When stacked against its peer, Johnson & Johnson (JNJ), LLY has also outperformed. Over the past year, JNJ stock has grown 50.3%.   

Moreover, sentiment on LLY remains highly optimistic. Among the 29 analysts covering the stock, the consensus rating is a “Strong Buy.” Its mean price target of $1,335.32 suggests 13.5% upside from current levels.