Wall Street brokerage Berenberg has upgraded Eli Lilly's (LLY) stock to a Buy rating as the pharmaceutical company's weight-loss drug sale steadily accelerate. Kerry Holford, a four-star rated analyst with a 57% success rate, boosted her rating on LLY stock from Hold previously, saying that it sees the drug maker exceeding its 2026 guidance driven by rapid growth of its weight-loss drug sales.

Holford also raised her price target on LLY shares to $1,400 from $1,220. The new price target is nearly 25% higher than where Eli Lilly's stock currently trades. In a note to clients, Holford said that Eli Lilly is now the undisputed market leader when it comes to obesity and diabetes medications. She adds that sales of Eli Lilly's new weight-loss pill called Foundayo, which launched in April of this year, should continue to accelerate in coming months.

Other Reasons to be Bullish on LLY Stock

She added that the Medicare GLP-1 Bridge program, which provides eligible Medicare Part D enrollees access to certain GLP-1 meds for $50 a month, "is fueling a steep uptick in Lilly's obesity drug demand."

Holford noted that the company's strong pipeline has been bolstered by the acquisition of psychedelic-focused treatment developer AtaiBeckley for mental health disorders and Centessa for sleep-wake disorders.

"Year to date, Lilly has committed cUSD60bn on more than 25 business development deals, with plenty of capacity to spend more," she wrote. "Many of the resulting new pipeline entrants have multibillion-dollar sales potential and offer important diversification optionality."