While the early week buzz centered around the U.S.-China trade agreement, another critical development unfolded quietly but forcefully. President Trump signed an Executive Order targeting what he called “Big Pharma price gouging,” with the intention of cutting prescription drug prices by a sweeping 80% to 90%.

The order, finalized Monday, May 12, proposed a “most favored nation” clause, one that would force the U.S. to match the lowest drug prices offered anywhere in the world. The policy sent shockwaves through the pharmaceutical sector, prompting immediate concerns over potential revenue hits.

Ordinarily, such news would spell trouble for major players like Eli Lilly and Company (LLY). But Wall Street analysts continue to recommend the stock as a “Strong Buy,” suggesting that any anxiety over the latest EO could present a buying opportunity.

About Eli Lilly Stock

Eli Lilly and Company (LLY), headquartered in Indianapolis, has long been a heavyweight in the global pharmaceutical arena, commanding a market cap of $678.1 billion. The company has carved out a formidable product mix spanning neuroscience, diabetes, oncology, immunology, and more.

On a year-to-date basis, LLY is down 7.31%, having set a 52-week low as recently as April 7.

From a valuation lens, LLY trades at 32.77 times adjusted forward earnings and 10.77 times sales. That's a noticeable premium to its industry peers, but both metrics represent a discount to the pharma giant's own 5-year average valuation multiples - suggesting that now is a reasonable time to pick up LLY shares.

Eli Lilly has announced a $1.50 per share dividend for the second quarter of fiscal 2025. The stock's annualized dividend of $6 per share translates to a forward yield of 0.84%. While it's not the fattest dividend yield in the pharma space, Eli Lilly has consistently increased its dividends for the past decade.

A Closer Look at Eli Lilly’s Q1 Earnings

On May 1, Eli Lilly opened the books on its Q1 2025 performance. The pharmaceutical giant reported revenues of $12.73 billion, marking a 45.2% year-over-year jump and outpacing the Street’s forecast of $12.62 billion. At the heart of this surge were the company's tirzepatide-based drugs, Mounjaro and Zepbound, acting as the wind in Eli Lilly’s sails.

Mounjaro, Lilly’s diabetes blockbuster, generated $3.84 billion in sales for the quarter, posting a 112.7% increase year over year. Meanwhile, its weight-loss sibling, Zepbound, also saw momentum building, clocking in at $2.31 billion in sales, rising 346.8% from the quarter before.

The company’s non-GAAP gross margin expanded 46.9%, landing at $10.6 billion, while non-GAAP net income also saw a 28.7% upswing, reaching $3 billion. Adjusted EPS came in at $3.34, up 29.5% from last year, though it fell short of the consensus estimate of $3.52.

Looking ahead, Lilly guided for full-year revenues between $58.0 billion and $61.0 billion. EPS forecasts for 2025 stand between $20.17 and $21.67 on a GAAP basis and $20.78 to $22.28 on an adjusted basis, factoring in acquired IPR&D charges and investment-related losses.

By comparison, analysts anticipate Q2 EPS to rise 41.1% to $5.53, with a full-year leap of 70% to $22.08, and another 39.6% climb in 2026, taking EPS to $30.82.

What Do Analysts Expect for Eli Lilly Stock?

Despite concerns over the impact of the President's latest EO, analysts on Wall Street seem unbothered.

Bernstein analysts, confident in the company’s trajectory, have doubled down on their Outperform rating, keeping the price target firm at $1,100.00. In a note to clients, the brokerage firm cited LLY's strong relationship with the Trump administration as a positive.

Overall, LLY stock carries a consensus “Strong Buy” rating. Out of 25 analysts, 21 firmly back it with a “Strong Buy,” one maintains a “Moderate Buy,” and just three choose to sit tight with a “Hold.”

The average price target of $994.08 represents potential upside of 38.9%, while the Street-high target of $1,190 signals a possible surge of 66.3% from current levels, reinforcing confidence that LLY still has plenty of gas left in the tank.