Eli Lilly’s Biggest Shareholder Just Filed to Sell $347 Million of Stock
Lilly's largest shareholder just filed to unload nearly $350 million in stock while analysts keep raising their price targets, and those two facts point in opposite directions for investors trying to read the room.
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Eli Lilly (NYSE:LLY | LLY Price Prediction) closed at $1,169.60, and the average Wall Street price target is $1,329.21. That puts the stock about 13.6% below where analysts think it should trade.
This week’s attention came from Lilly Endowment, the Indianapolis charitable foundation and Lilly’s largest shareholder. It filed a Form 144 to sell 300,000 shares worth $347,247,000 through J.P. Morgan Securities.
The filing arrived with the stock about 9.5% below its record intraday high of $1,292.65. Lilly leads the GLP-1 drug market. It has a market value of about $1.04 trillion, so a large sale by its biggest holder can look like a warning.
That gap more likely reflects a mispriced stock than a target that has fallen behind the market.
A Charity’s Payout Calendar Explains This Sale
Private foundations must pay out roughly 5% of their assets annually. An Endowment spokeswoman explained that the foundation must raise additional cash to cover its required distribution.
J.K. Lilly Sr. and his sons founded the Endowment in 1937, and the shares were a gift from the J.K. Lilly Sr. Trust in 1948. The foundation funds community development, education, and religion, mostly in Indiana.
As of June 30, it held 90,376,978 shares, or 9.6% of the company. That is more than BlackRock’s (NYSE:BLK) holding, which totals 67.5 million shares.
The proposed sale represents about 0.33% of that position. A legally required payout runs on a set schedule, so it tells you nothing about Mounjaro demand or pipeline risk.
Thursday’s Swing Left Lilly’s Franchise Intact
Thursday’s session was volatile. Shares fell as low as $1,131.21, nearly 5% below the prior close, before closing down 1.61%.
The business has improved since the August peak. Second-quarter revenue was $22.97 billion, up 47.7%. Mounjaro brought in $9.94 billion and Zepbound $4.93 billion.
About 6 out of 10 U.S. obesity prescriptions are for Lilly drugs. Lilly’s share of the international incretin market has reached roughly 55%. Management also raised 2026 revenue guidance to $85 billion to $87 billion.
The weak spot is pricing. U.S. price fell 9% excluding rebate adjustments. Management expects wider access to keep driving net prices down while higher volume makes up the difference.
Analysts Are Raising Targets as the Stock Falls
Morgan Stanley (NYSE:MS) raised its target to $1,430, and Cantor Fitzgerald moved to $1,440 from $1,410. Overall coverage includes six Strong Buy, plus 19 Buy, three Hold, one Sell and one Strong Sell ratings.
These target increases during a drop follow the earnings report. Lilly reported non-GAAP EPS of $8.38 against expectations of $6.58, even after $3.03 per share of acquired IPR&D charges.
At about 24x forward earnings, the stock is priced below what its growth rate would support. Targets are estimates; I would be wrong if price erosion exceeds prescription growth.
Endowment Selling Adds Little Supply
In January, the Endowment sold 293,446 shares for about $322 million. It sold another 302,403 for about $385.7 million on August 19, the day Lilly hit its record.
The foundation sold near the top in August and is selling again at a lower price, as a schedule is at work and the payout must be met regardless of stock performance.
The 300,000 shares equal about 14% of a typical recent day’s volume of roughly 2.13 million shares. Spread over several sessions, that is tiny against a float of 888.95 million shares.
Should You Buy or Sell LLY Stock
Lilly is up 9.36% this year, behind the S&P 500’s 13.49%. Over the past 12 months, however, it has gained 39.17%.
Third-quarter results arrive on October 29, before the open. The report needs to show growth from the Medicare Bridge program and Foundayo sales above the second quarter’s $67 million in U.S. revenue.
Guidance also has to hold at or above $35.50 to $36.50 in non-GAAP EPS, even with lower U.S. prices. If management cuts that range, the target gap is more likely a warning than an opportunity.
Lilly looks undervalued at this price relative to analyst targets. The downside scenario depends on net prices falling faster than prescriptions grow. The Endowment’s sale says nothing about that, while the price drop has already priced in a slowdown that has not shown up in the results.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
