What Happened?
Shares of global pharmaceutical company Eli Lilly (NYSE:LLY) jumped 3.2% in the afternoon session after the stock extended its positive momentum partly fueled by reports of major insider buying by top executives, including the CEO, which is often seen as a strong vote of confidence. Additionally, news that the company has signed a multi-billion dollar deal with an AI health tech company (Superluminal) to discover and develop new obesity medicines also contributed to the positive sentiment. Finally, the company's decision to increase the price of its popular diabetes and weight-loss drug Mounjaro in the UK, in response to US political pressure, was also seen as a positive for future revenue.
After the initial pop the shares cooled down to $705.51, up 3.1% from previous close.
Is now the time to buy Eli Lilly? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Eli Lilly’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.1% on the news that reports of significant insider buying by top executives, including the CEO, sent the stock rebounding from a recent selloff. The move came after regulatory filings on Tuesday revealed that several top executives, including CEO David Ricks, had purchased nearly $2.9 million worth of company stock. Ricks alone acquired over $1 million in shares, a move investors often interpret as a strong vote of confidence from leadership. This buying activity follows a significant selloff last week, where the stock dropped about 14% due to disappointing trial data for an oral obesity pill. The insider purchases are seen as a signal that management considers the stock undervalued after the recent decline and believes the market overreacted, providing a catalyst for Wednesday's rebound.
Eli Lilly is down 9.3% since the beginning of the year, and at $705.51 per share, it is trading 26.5% below its 52-week high of $960.02 from August 2024. Investors who bought $1,000 worth of Eli Lilly’s shares 5 years ago would now be looking at an investment worth $4,656.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.