Eli Lilly: The best pharma company in the world

The diabetes/obesity care leader and highest growth/margin pharma compounder has derated due to drug pricing concerns and compounder competition, learn about this resilient giant

Welcome to the 43rd investment case, 35th resilience, 24th reshoring/sovereignty and 6th healthcare idea on Crack the Market (and the most comprehensive Eli Lilly investment case you will find online)! Join me as I dissect the best pharma company in the world, which has recently derated and is poised for a rerating, the leader in diabetes and obesity with one of the premier R&D engines, the fastest growth and highest margins in the pharmaceutical sector over the next decade and one of the highest IRRs on its R&D pipeline along with very strong optionality thanks to its cash generation.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China along with opportunities in the AI data center value chain, Healthcare and many other megatrends.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 41 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

• CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.

• Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.

• Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.

• Halma (resilience idea): High quality compounder in safety, health and environmental technologies.

• Quanta Services (resilience & reshoring idea): Countercyclical compounder riding a multi decade infrastructure buildout.

• Infineon (China idea): Power semiconductor leader with strong structural drivers (AI power and China auto) amidst a cyclical recovery.

• Hubbell (resilience & reshoring idea): Pure play on US electrification demand driven by AI and grid investment cycle.

• Iberdrola (resilience & reshoring idea): Best integrated utility in the world with a stellar track record and solid growth driven by networks and renewables

• Nvidia (AI & data center idea): The backbone of the AI world is unstoppable.

• Veolia (resilience & reshoring idea): Resource management giant (water, waste, energy) due for a rerating.

• TJX (resilience idea): The retail giant that keeps winning.

• DSM-Firmenich (resilience idea): The diversified ingredient powerhouse benefiting from a transformational deal.

• Zoetis (resilience idea): Leader in animal healthcare.

• Prysmian (reshoring idea): Global cable leader entering a golden age.

• Bentley Systems (resilience & reshoring idea): The software compounder bringing infrastructure into the AI age.

• Givaudan (resilience idea): The highest quality and most resilient ingredient compounder has a compelling valuation.

• First Solar (reshoring idea): The rising Sun in a new electricity supercycle.

• Arcadis (resilience & reshoring idea): An engineering and design consultancy giant poised for a rerating.

• Thermo Fisher (resilience & reshoring idea): Life Science tools giant just had its clearing event and is a stealth reshoring winner.

• Nexans (reshoring idea): Electrification pure play with visibility into 2030.

• Croda (resilience idea): A covid darling with a ridiculous valuation is at an inflection point.

• Copart (resilience idea): One of the best businesses on Earth is being sold off, should you jump in?

• Schneider Electric (resilience & reshoring idea): The Electrification champion that keeps compounding.

• Cadence (resilience idea): A defensive compounder in the semi space & one of the most profitable software businesses in the world is getting better.

• SAP (resilience idea): The unstoppable growth engine behind every business.

• FICO (resilience idea): The Score Behind the Score.

• Siemens (resilience & reshoring idea): The best conglomerate on Earth is sitting on EUR70bn of optionality.

• MP Materials (resilience & reshoring idea): The Western rare earth champion.

• Sopra Steria (resilience & reshoring idea): This boring IT business is a hidden Defense and Sovereignty play.

• Hoffmann Green Cement (reshoring idea): Cementing a green future.

• Oracle (resilience idea): The Oracle of the AI Age.

• Dassault Systemes (resilience & reshoring): Why are investors overlooking this Software giant?

After reading this article, you will understand why this company is so special thanks to its world beating drug pipeline in the obesity/diabetes care space, why the company is poised to see best in class growth and excellent execution from a talented management team, why its target market is growing significantly and presents upside with future applications of its medicines, why the company has derated so much recently and why it may be poised for a turnaround.

In this article I go through:

1. Eli Lilly’s business and how it dominates the anti diabetes and obesity market.

2. Why this is the best pharmaceutical company in the world thanks to the leading R&D engine, highest growth and margins in the sector.

3. What are GLP1s and how Eli Lilly along with Novo Nordisk dominate the most exciting and fastest growing market in healthcare.

4. How the company’s R&D pipeline remains world leading and provides a decade+ of revenue and earnings growth with potential new markets that could expand its TAM.

5. Why its valuation has fallen so much in the last year, creating a unique opportunity.

Eli Lilly Investment Case