Eli Lilly and Company has found its footing after two weeks of selling, closing Tuesday at $1,107 with short sellers quietly reducing positions and analysts continuing to lift targets — a setup where the bear pressure is visibly fading even as the stock remains well below consensus.
The price action tells the clearest story this week. After the 5.4% decline to $1,098 documented in last week's note, LLY has recovered roughly 1% over the past five sessions. The stock is up 3.9% over the past month, meaning the late-May surge has not been fully unwound. The gap to the consensus target of $1,219 remains wide — about 10% — which frames the current level as still-discounted relative to where the Street thinks it should trade. Importantly, the short interest data has moved in the same direction as the price: shorts eased 2.1% on the week to 1.16% of free float, down from the June 16 peak of around 1.19%. That's a small absolute figure, and the 30-day increase of 32% is a reminder that the mid-June build happened fast — but the direction has now reversed.
Positioning looks notably relaxed for a stock with this kind of headline risk. The lending market is as loose as it gets: availability is effectively uncapped, with more than 633 million shares available to borrow against roughly 10.4 million currently short. Borrowing cost ticked up to 0.50% on June 23 from 0.35% the prior session, but that's still the low end of the 30-day range and does not signal any pressure from the borrow side. Options traders have also dialled back defensiveness: the put/call ratio dropped to 1.10, now slightly below its 20-day average of 1.14 and near the lower end of its recent range. That's a notable contrast to last week, when the PCR was still running at 1.19 and above its mean. The short score has nudged higher to 31.7 but remains well within the low-conviction zone — the short-selling community, despite having built positions through early June, does not appear to be pressing.
The Street remains firmly constructive. Analyst targets have been moving in one direction only: Jefferies raised its target to $1,350 on June 9, the most recent action. BofA lifted to $1,251 in late May, and Barclays nudged to $1,400 following the Q1 print. The bull case centres on tirzepatide volume ramp, the CNTA and Kelonia pipeline additions, and durable growth in neuroscience and cardiometabolic franchises. Bears focus on the risks that haven't gone away: potential pricing and rebate pressure under continued policy uncertainty, slower-than-consensus forglipron uptake, and an unadjudicated FAERS adverse event flag that has circulated in recent weeks. On valuation, the forward P/E of 27.4x and EV/EBITDA of 22.1x have both drifted lower over the past 30 days — a modest multiple compression that reflects the stock giving back some of its premium. The stock scores 78th percentile on EPS surprise and 73rd on 90-day EPS momentum, anchoring the bull case in earnings delivery rather than just sentiment.
Institutional ownership offers no fresh signal this week. The Lilly Endowment trimmed again in early May — 15,828 shares sold, which is a rounding error against its 91.9 million share stake. BlackRock, Capital Research, and State Street all added modestly in the most recent reporting period. There is no indication of a large holder reducing meaningfully, and the insider register is quiet after the June 10 sale by a subsidiary president.
With next earnings scheduled for August 5, the coming weeks are likely to be driven by incremental data points — pipeline readouts, any FDA developments on GLP-1 competitors, and the continuing policy backdrop around drug pricing. The central question heading into that print is whether tirzepatide volume trajectories are accelerating enough to outpace the pricing headwinds that bears have flagged, or whether the Q1 beat was a high-water mark.
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