Eli Lilly slips after HSBC downgrade

Shares of drugmaker Eli Lilly LLY.N fall 5.15% to $938.27

Brokerage HSBC downgrades Lilly to 'Reduce' from 'Hold', cuts PT to $850 from $1,070

Brokerage says the total addressable obesity market size of $150 billion is elevated, and is likely to be $80 billion to $120 billion by 2032, with price competition to be significant

HSBC says LLY's forecast implies that it can continue to defy gravity with volume growth, that is there is a significant price elasticity of demand, unlike embedded in its peer Novo Nordisk's NOVOb.CO outlook

Adds, while the launch of oral drugs might expand access to anti-obesity medications, the compliance and persistence of these drugs might disappoint

"Whilst the momentum in the launch might be positive, we think oral drug launch expectations for Lilly are too high," HSBC says

Adds the current market expectations of $1 billion to $1.3 billion for the launch of Lilly's orforglipron for 2026 seem optimistic

LLY shares down 12.6% YTD