5 Best Stocks to Buy for Deflation

4. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 70

Eli Lilly and Company (NYSE:LLY) is an American pharmaceutical company. Pharma and healthcare are some of the best sectors to invest in during deflationary periods, as patients cannot forego important medicines and urgent treatments despite slowed household spending. On September 22, Eli Lilly and Company (NYSE:LLY) announced that the FDA authorized its oral lung cancer medication, Retevmo, under the agency’s accelerated approval for specific adult patients with solid tumors. Eli Lilly and Company (NYSE:LLY)’s latest quarterly dividend per share of $0.98 was paid on September 9. 

On September 22, UBS analyst Colin Bristow upgraded Eli Lilly and Company (NYSE:LLY) to Buy from Neutral with a price target of $363, up from $335. The analyst now sees Eli Lilly and Company (NYSE:LLY) as the most attractive name in large cap pharma, with the highest potential upside to estimates. With double digit top and bottom line growth for five years from a “diversified business” and lower patent issues compared to peers, Eli Lilly and Company (NYSE:LLY) “currently deserves a significant premium”, contended the analyst.

According to Insider Monkey’s data, 70 hedge funds were bullish on Eli Lilly and Company (NYSE:LLY) at the end of Q2 2022, up from 53 funds in the last quarter. Arrowstreet Capital is the largest stakeholder of the company, with 3.5 million shares worth $1.16 billion. 

Here is what Baron Health Care Fund has to say about Eli Lilly and Company (NYSE:LLY) in its Q2 2022 investor letter:

“Eli Lilly and Company is a global pharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of diabetes, oncology, immunology, and neuroscience. Stock performance was strong due to positive study results for Eli Lilly’s drug Tirzepatide (subsequently branded Mounjaro), which delivered up to 22.5% weight loss in adults with obesity. We think Tirzepatide is in the early innings of adoption in a large obesity market where penetration of anti-obesity medications is currently low. We continue to think Eli Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to solid revenue and earnings growth over many years.”