Is Eli Lilly and Company (LLY) the Best Quality Stock to Invest in Now?

Published on March 14, 2025 at 10:26 pm by Bob Karr in News

We recently published a list of 12 Best Quality Stocks to Invest in Now. In this article, we are going to take a look at where Eli Lilly and Company (NYSE:LLY) stands against other best quality stocks to invest in now.

Tom Lee, co-founder of Fundstrat Global Advisors, believes that a significant rebound is in the offing, despite the tough start to the year. The strategist opines that there is a possibility of ~10% – 15% bounce over the coming months. In an interview with CNBC, he stated his expectations about March, April, and May witnessing the rally. Therefore, missing critical trading days can be a mistake for investors.

What Lies Ahead?

Lee believes that investors can consider buying as the markets are unsettled. In an interview with CNBC, he went on to explain that the market’s 10 best days last year resulted in the addition of up to 20 percentage points for the broader S&P 500. However, if we exclude these 10 days, the index increased by only 4%. According to him, the best days might be around the corner. If there are tensions related to the growth or related to the employment market, Trump or the US Fed can intervene to bring some stability. These are the favourable catalysts for the upcoming weeks, says Lee. Overall, he believes that a large chunk of the bad news has been priced in as markets have seen a significant decline.

Signs of Economic Strength Remain

Morningstar, while echoing the views of Adam Hetts (Janus Henderson Investors portfolio manager), mentioned that the longer-term perspective is expected to provide investors a silver lining. Hetts believes that there are bright spots in the international markets such as Europe and China, that have surpassed the performance of the US stocks since the beginning of the year. Even though the mega-cap tech stocks have been declining, they are getting cheaper as compared with the elevated valuations just a few months ago.

According to experts, there are several signs of economic strength. Gus Faucher, chief economist for PNC Financial Services Group, told Morningstar that consumers continue to spend amidst weakness in the sentiment data. Also, the labor market has been holding up. Overall, the chief economist doesn’t see any sort of fundamental weaknesses in the broader economy that can signal a problem. As per Morningstar chief US market strategist David Sekera, the investors are required to focus on the fundamentals and valuations, while maintaining a long-term view.

Our Methodology

To list the 12 Best Quality Stocks to Invest in Now, we sifted through the holdings of iShares MSCI USA Quality Factor ETF. Next, we chose the stocks that are popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiment, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 115

Eli Lilly and Company (NYSE:LLY) discovers, develops, and markets human pharmaceuticals. Morgan Stanley reaffirmed the positive stance on the company’s stock, maintaining an “Overweight” rating and a price objective of $1,146.00. The firm’s reaffirmed rating and price target demonstrate confidence in the company’s position and prospects within the industry. The company has announced its plans to strengthen its domestic medicine production throughout therapeutic areas by building 4 new pharmaceutical manufacturing sites in the US. This results in Eli Lilly and Company (NYSE:LLY)’s total US capital expansion commitments to over $50 billion since 2020.

The company’s optimism regarding the potential of its pipeline throughout therapeutic areas – cardiometabolic health, oncology, immunology and neuroscience – fuels its unprecedented commitment to the domestic manufacturing build-out. Notably, Bernstein analysts reaffirmed an “Outperform” rating on Eli Lilly and Company (NYSE:LLY)’s stock with the price objective of $1,100, highlighting its strategic orientation and robust pipeline. Eli Lilly and Company (NYSE:LLY)’s focus on expanding the manufacturing footprint and advancing development pipeline cements its focus on growth and innovation.

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” Q4 2024 investor letter. Here is what the fund said:

“Eli Lilly and Company (NYSE:LLY): LLY was a top detractor in the fourth quarter following a rare revenue miss in the company’s 3Q update. The greater than $1 billion miss in the tirzepatide complex (Mounjaro/Zepbound) was caused by a combination of factors, including wholesaler stocking patterns (2Q inventory build, 3Q sell through), refrigerated supply chain constraints, timing of the company’s direct-to-consumer efforts, and the pace of international market launches. We believe the diabetes/obesity/weight-loss market is enormous and that current GLP-1 drugs, though no longer supply constrained, are greatly in demand. We are confident that LLY’s recent sales shortfall was supply chain-related and that the company’s tirzepatide franchise growth will soon reaccelerate.

LLY discovers, develops, manufactures, and markets pharmaceutical products. The company manufactures and distributes products through facilities in the United States and seven other countries and sells into 110 countries. The company has a broad and deep portfolio of products including a focus on diabetes, oncology, immunology and neuroscience. More recently, LLY’s GLP-1 diabetes drug Mounjaro and obesity drug Zepbound, have delivered strong revenue growth, and investors are optimistic that the company’s recently approved Alzheimer drug, Kisunla, will add to that growth.

LLY has a stable portfolio of franchise products, which enables it to invest heavily in its product pipeline. We believe that this combination of franchise and growth products will drive high teens revenue growth and a four-fold increase in free cash flow in the next five years.”

Overall, LLY ranks 11th on our list of best quality stocks to invest in now. While we acknowledge the potential of LLY as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.

Yahoo Finance

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Published on November 14, 2025 at by Inan Dogan, PhD

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