LLY: Giant Gem Bounces – Opportunity Unfolding?
Exploring the Technical Rebound and Emerging Opportunities in the Pharma Giant
This publication, available to everyone, delves into the fundamental and technical analysis of LLY 0.00%↑, which is 20% below its all time highs and presents strong fundamentals with a bullish reversal in play. The question is: Will the price continue the bullish trajectory? We will study the fundamentals and technicals today. Before continuing let’s do a brief catch up with recent publications. Click in each title for access.
Latest Publications to Read:
A fundamental and technical analysis also open for everyone, assessing the financials and oversold conditions behind the recent bad news. Previous companies like Boeing, Netflix and even Microsoft have had difficult times in the past.
Since last Wednesday, the stock market, particularly the S&P 500 and Nasdaq 100, has been characterized by indecision candles. This edition offers a technical analysis of the SPX, NDX, PLTR, and examined the potential selloff in Tesla, a scenario that precisely anticipated the selloff of last Thursday for the electric car maker. This publication also provided analysis for LLY and AVGO.
Get access to support and resistance levels for over 40 securities, including U.S. indices, ETFs, Mag 7 stocks, and more. Updated every Friday for the week ahead, each edition includes case studies on TSLA and SPX, demonstrating how to use these levels to manage risk and avoid premature decisions.
A comprehensive analysis of the latest events with Tesla, and the most comprehensive technical update for 20 securities, including U.S. indices, ETFs, Mag 7 stocks, PLTR, NFLX, SLV, GLD and more. Each analysis includes price targets and support/resistance levels monitor reversals or validate trends.
Unlock all the content posted on smartreversals.com upgrading your subscription:
This occasional publication, available to everyone, presents an example of my fundamental approach combined with technical analysis that you find in the site for 40 companies listed in the S&P500 like META, AAPL, MSFT, KO, PEP, BAC, LMT, JPM, GOOG, AAPL, AMZN, PLTR, and many more.
Other recent publication for everyone included fundamentals and technicals for CRWD, NOW, HOOD, and SNOW is here:
Let’s continue with LLY!
Eli Lilly and Company, commonly known by its stock ticker LLY 0.00%↑, is a major American pharmaceutical company headquartered in Indianapolis, Indiana, the company discovers, develops, manufactures, and sells pharmaceutical products worldwide. As of Today, it’s the 13th largest company in the U.S. by market capitalization nearing $700 Billion, very close to JP Morgan (JPM), Visa (V), and WMT (WMT). This is a big guy that was in the top 10 few weeks ago and it’s recovering from a pullback.
At its core, Eli Lilly is a research-based company focused on creating medicines that address a wide range of health issues. The company's primary business revolves around several key therapeutic areas: Endocrinology, Obesity, Oncology, Immunology, and Neuroscience.
Eli Lilly Market Brief: GLP-1 Dominance Powers Transformational Growth
Eli Lilly and Company (NYSE: LLY 0.00%↑) has emerged as a pharmaceutical powerhouse, riding an unprecedented wave of success in the GLP-1 market (Mounjaro and Zepbound) that is reshaping both the company and the broader industry landscape. The giant is executing an ambitious growth strategy that leverages current blockbuster revenues to fuel massive manufacturing expansion and next-generation drug development, fundamentally transforming its financial profile in the process.
Pipeline Excellence: Building on GLP-1 Leadership
Eli Lilly's strategic focus centers decisively on its GLP-1 franchise for diabetes and obesity management, where the company is establishing clear market leadership alongside Danish rival Novo Nordisk.
Tirzepatide Franchise Delivers Exceptional Performance
The dual-agonist tirzepatide, marketed as Mounjaro for diabetes and Zepbound for obesity, has become Lilly's crown jewel. Mounjaro generated explosive growth with sales surging 124% to $11.5 billion in 2024, while Zepbound contributed an additional $4.9 billion following its late 2023 launch. The momentum continues into 2025, with projections calling for Mounjaro sales to climb over 75% and Zepbound to surge 145%, supported by regulatory crackdowns on compounded alternatives that have historically diverted market share.
The upcoming SURPASS-CVOT cardiovascular outcomes data represents a pivotal catalyst that could significantly expand tirzepatide's addressable market and reinforce its competitive positioning against existing therapies.
Strategic Diversification Beyond Metabolics
While GLP-1 dominance defines Lilly's near-term trajectory, the company is strategically investing in other high-value therapeutic areas. Donanemab, recently approved as Kisunla for early-stage Alzheimer's disease, is projected to achieve blockbuster status with sales exceeding $1 billion by 2027, addressing one of medicine's most challenging and commercially attractive markets.
The company is also strengthening its oncology capabilities through targeted acquisitions, including the strategic purchase of Scorpion Therapeutics' PI3K inhibitor program, demonstrating disciplined capital allocation toward high-potential assets that complement its core competencies.
Financial Transformation: Growth at Scale
Eli Lilly's financial statements tell the story of a company undergoing profound transformation, with revenue catapulting from $28.5 billion in 2022 to $45.0 billion in 2024—a remarkable 58% increase over two years.
Income Statement Highlights
This exceptional top-line performance has generated equally impressive operational leverage, with operating income more than doubling over the two-year period to $17.5 billion. Net income reached $10.6 billion in 2024, reflecting the company's ability to convert revenue growth into substantial bottom-line results.
Critically, Lilly maintained its commitment to innovation throughout this growth phase, investing $11 billion in R&D during 2024—representing 24% of total revenue. This substantial reinvestment ensures a robust pipeline to address future patent expirations, including the anticipated loss of Trulicity exclusivity in 2026.
Balance Sheet Evolution: Financing Ambitious Expansion
Lilly's rapid transformation required significant capital deployment, fundamentally altering the company's balance sheet structure and financial risk profile.
The company's historic $9 billion manufacturing investment in Indiana exemplifies this capital-intensive strategy, specifically designed to eliminate supply constraints that have limited tirzepatide's commercial potential and ensure adequate capacity for projected demand growth.
This strategic use of financial leverage has generated exceptional shareholder returns, with Return on Equity (ROE) reaching an outstanding 84.3% in 2024, compared to 62.7% in 2022. While this demonstrates highly effective capital deployment in the current high-growth environment, it also introduces financial risk that requires careful monitoring.
In terms of Revenue and operating income, the growth has been consistent during the last years.
Strategic Outlook
Eli Lilly is executing a bold transformation strategy that leverages current market dominance to build sustainable competitive advantages across multiple therapeutic areas. The company's ability to meet extraordinary demand for its GLP-1 products through massive manufacturing investments will prove critical to realizing its full commercial potential and maintaining market share against intensifying competition.
The substantial financial leverage, while introducing new risk dimensions, is supported by powerful cash flows from established blockbuster products and a deep pipeline of potential successors. Key risks include intensifying competitive pressures, navigation of patent cliff dynamics, and potential pricing pressures from government payers, as evidenced by Medicare price negotiations affecting products like Jardiance.
However, with a robust late-stage pipeline, clear strategic vision, and demonstrated execution capabilities, Eli Lilly appears well-positioned to continue its trajectory as a pharmaceutical industry leader. The company's current transformation represents not merely cyclical growth, but a fundamental repositioning that could define its competitive position for the next decade.
Technical Analysis
After a stellar rally in 2023 and H1 2024, the stock is consolidating at the $700 are as highlighted by the green arrows. That support zone matches the lower edge of the volume shelf where the lower Bollinger band was located in the previous three bullish reversals (not in the last one though), so that zone has proven to provide strong support and the bullish stochastic crossover suggests the bounce has just started.
If the pattern observed during the previous bullish reversals repeats, the minimum destination is the $800 zone, and more precisely $821 using the monthly resistance provided last Friday.
For this week, the price suggests a visit to $784, as long as $757 remains as support (remember the market is showing indecision so a pullback may be brewing).
$765 is a monthly support level strenthening the base for any eventual market reversal.
The bullish thesis can be considered postponed if $757 is breached, and for more risk tolerance, $742 can be considered the line in the sand.
In any case, the fundamentals look solid for LLY, as their research and development, so as of today, this company has potential.
Every Friday, the support and resistance levels for LLY are published along with other 40+ securities.
This type of analysis is conducted permanently for the securities included in the Weekly Compass such as: TSLA, NVDA, META, BITCOIN, PLTR, AMZN, MSFT, GOOG, AAPL, NFLX, BRK.B; and indices/ETFs including: SPX, NDX, IWM, SMH, DJI, GLD, TLT, and SLV. If you trade or invest in some of them, this publication is for you!
Upgrade and unlock all the premium content. There are even more securities fundamentally analyzed and included every Friday in the S/R levels.
Thank you, and have a good night.
This technical and fundamental analysis has educational purposes and is not intended to be investment advice.
Yess! Thank you for this post!
will initiate position at 742 to 752 then. excellent analysis.