Eli Lilly is no longer a “boring” stock, this investor says

Barometer Capital Management CEO and chief investment officer David Burrows said Eli Lilly (Eli Lilly Stock Quote, Chart, News, Analysts, Financials NYSE:LLY) remains a core long-term healthcare holding as the pharmaceutical sector shows early signs of renewed momentum and the company continues to benefit from strong growth in obesity and diabetes treatments.

Speaking on BNN Bloomberg Market Call on Dec. 19, Burrows said Barometer has been selectively building exposure to healthcare names during periods of weaker sentiment, positioning for a broader sector recovery.

“When a sector is out of favour, it doesn’t mean we don’t care,” Burrows said. “We build a farm team, things we’d like to own if the sector started to wake up.”

Burrows said the healthcare sector has begun to show improvement over the past three months, a shift that was quickly reflected in Eli Lilly’s share price, which moved to new highs before pulling back to technical support levels.

He described the move as constructive and said it reflects a broader transformation underway at the company.

“Lilly is going through a transformation,” Burrows said. “They’re seeing massive growth in the GLP-1 drugs, Mounjaro and Zepbound, and that has shifted the company from being a boring, steady income earner to a real growth stock.”

Burrows said Eli Lilly has emerged as a clear leader within the pharmaceutical sector, supported by both earnings momentum and the potential for valuation multiple expansion.

He added that longer-term growth prospects remain compelling, particularly if the company is successful in transitioning its weight-loss treatments from injectable formats to oral therapies.

“It’s hard to imagine that the growth in weight-loss drugs is going to slow if they’re able to move from an injection to a convenient oral pill,” he said. “This is our poster child for what we want to own in healthcare, and the market is clearly going to grow.”

The stock has gained 39.97% over the past 12 months and is up 534.0% over the past five years. Of the analysts covering the company, 29 rate the shares “Buy,” eight rate them “Hold,” and one rates them “Sell,” with a consensus price target of US$1,110.57.

Eli Lilly shares closed Dec. 19 at US$1,070.93.

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