This article first appeared on GuruFocus.
Eli Lilly (NYSE:LLY) won a fresh Wall Street endorsement Tuesday as Berenberg upgraded the pharmaceutical giant to Buy from Hold, arguing that accelerating obesity-drug demand could push results above the company's already ambitious 2026 outlook. Analyst Kerry Holford also raised her price target to $1,400 from $1,220, implying nearly 25% upside and reinforcing Lilly's status as Wall Street's dominant obesity-drug bet.
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Berenberg's call centers on Lilly's growing lead in obesity and diabetes treatments and its ability to translate that advantage into another earnings beat. The brokerage expects Lilly to exceed its 2026 revenue guidance of $85 billion to $87 billion, according to Barron's.
A major piece of that thesis is Foundayo, Lilly's once-daily oral GLP-1 treatment, which won FDA approval in April and can be taken without food or water restrictions.
Early adoption has been strong. Lilly said Foundayo has already captured more than 30% of new U.S. patients starting oral weight-loss medicines, giving the company another growth engine alongside injectable treatments Zepbound and Mounjaro.
That matters because oral drugs could significantly broaden the obesity market by attracting patients reluctant to use injections while also easing some manufacturing constraints associated with injectable therapies.
Berenberg also sees value beyond Lilly's current GLP-1 franchise, with the company reinvesting obesity profits into its broader pipeline, including next-generation obesity candidate retatrutide and expansion into other therapeutic areas.
The upgrade raises the bar for Lilly's next earnings reports.
Investors should watch Foundayo prescription growth, Zepbound and Mounjaro sales, manufacturing capacity and whether management raises its 2026 outlook. Sustained market-share gains would support Berenberg's $1,400 target.
Valuation remains the main risk. Lilly already trades at a premium multiple, meaning slower prescription growth or disappointing pipeline data could pressure shares quickly. Conversely, continued Foundayo acceleration and stronger-than-guided revenue would give investors a clearer reason to tolerate that premium.