Eli Lilly upgraded at CFRA as minimal impact seen from pharma tariffs

• CFRA Research has upgraded Eli Lilly from a hold to a buy rating, expecting the company to largely avoid the 100% tariffs on imported branded medications due to its plans to expand U.S. manufacturing capabilities.

• Eli Lilly plans to invest approximately $50 billion in U.S. manufacturing, including a new $5 billion production facility in Virginia, which positions the company favorably in terms of domestic drug production.

• As a result of these developments, CFRA has raised Eli Lilly's stock price target from $700 to $835, suggesting a potential upside of around 15%.

• The company’s strategy is further bolstered by a $6.5 billion investment in a plant for small molecule drugs and the recent European approval of the Alzheimer's medication Kisunla.

Recommendation Rating: Strong Buy

CFRA Research has upgraded Eli Lilly (NYSE: LLY) from a hold to a buy rating, anticipating that the pharmaceutical company will largely avoid the 100% tariffs imposed on imported branded medications. President Trump declared that businesses establishing new manufacturing facilities in the United States would be exempt from these tariffs.

In February, Eli Lilly, headquartered in Indianapolis, committed to significantly enhance its U.S. manufacturing capabilities, raising its investment plans to approximately $50 billion. Further demonstrating this commitment, the company announced in September its intention to develop a new $5 billion production facility in Virginia.

As a result of these developments, CFRA has increased Eli Lilly's price target from $700 to $835, indicating a potential upside of around 15% based on the stock's closing price on Friday. Analyst Sel Hardy stated that Lilly is “well positioned with its plans to expand its investment footprint in the U.S., enhancing its domestic drug production capacity across various therapy areas.”

Moreover, Hardy pointed out that Eli Lilly's recent announcement of a $6.5 billion investment in a new plant dedicated to the manufacturing of small molecule drugs further solidifies its growth strategy. He also noted the positive impact of the recent European approval of the Alzheimer's medication Kisunla (donanemab).