Tariffs Weigh on Eli Lilly Stock (LLY) Ahead of Earnings
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The pharma sector had hoped that healthcare would be spared from President Trump's tariffs. However, that no longer appears to be the case with the Trump administration threatening import duties of up to 200%, news that has been a drag on Eli Lilly and other pharmaceutical stocks.
So far, Eli Lilly has responded to the looming tariff threat by announcing that it will invest $27 billion to build four new manufacturing plants in the U.S. as demand for its weight-loss and diabetes drugs soars and the company develops new medications.
Manufacturing Base
The U.S. is already Eli Lilly's manufacturing base. Since 2020, the Indiana-based company has committed $50 billion to bolster its U.S. manufacturing. That investment has helped ease drug supply shortages of its popular prescription medications.
Management at Eli Lilly has said that the majority of the company's drugs are made in America. Still, the looming threat of steep tariffs on the pharma sector has been weighing on LLY stock heading into the company's earnings, where expectations are high for strong sales and profits from the weight-loss drugs.
LLY stock has risen 4% this year, underperforming the benchmark S&P 500 index.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 16 Buy, two Hold, and one Sell recommendations issued in the last 12 months. The average LLY price target of $1,006.80 implies 26.07% upside from current levels.
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