Citigroup reiterates a "buy" rating on Eli Lilly (LLY.US) on the bullish outlook for Tirzepatide, the "miracle weight loss drug"

Citi has resumed coverage of Eli Lilly (LLY.US) with a "buy" rating and a target price of $1060, citing its positive outlook on the sales prospects of its GLP-1 product line, including its blockbuster weight loss drug Zepbound, which contains tirzepatide.

The bullish view of analyst Peter Verdult is based on an upgrade in his forecast for tirzepatide, which is marketed as Mounjaro for diabetes and Zepbound for obesity. The analyst reached his conclusion based on the latest sales report for the drug and prescription trends and guidance.

He also mentioned an upgrade in his expectations for orforglipron, an oral GLP-1 agonist that is currently being studied for weight loss.

The analyst believes that Roche's oral GLP-1 candidate, CT-996, is unlikely to challenge orforglipron due to the risk of a higher incidence of heart rate elevation and nausea, as disclosed recently in a medical event in Europe.

Recent research has found that patients with obesity who use Mounjaro, Eli Lilly's weight loss and diabetes drug that contains tirzepatide, lose more weight than those who use Ozempic, Novo Nordisk's weight loss and diabetes drug that contains semaglutide.

The study is significant for the two pharmaceutical giants, Novo Nordisk and Eli Lilly, which are forming a monopoly in the weight loss drug market, and could prompt more patients with obesity or those trying to lose weight through injections to switch to Eli Lilly instead of Novo Nordisk, potentially boosting Eli Lilly's stock price.