Eli Lilly's Stock Spikes, Yet Team Jim Cramer Holds Back On Recommending Immediate Buying: 'Wait For A Pullback'

Jim Cramer does not recommend investors to buy Eli Lilly (NASDAQ:LLY) stocks yet, despite the recent jump, CNBC reports.

Responding to an email query, Cramer mentioned a new 12-month price target of $600 for Eli Lilly.

Despite the promising outlook, the rapid ascent of Eli Lilly’s stock has led to caution. The recommendation is to wait for a pullback before making a purchase, emphasizing the importance of not buying a full position all at once. The long-term potential of Mounjaro is also highlighted, as Eli Lilly explores its use for conditions beyond diabetes and obesity.

“As much as we like the long-term story, we just aren't comfortable recommending a stock that has had the quick move that Eli Lilly has in recent weeks. We tend to view parabolic moves as an opportunity to book profits — not a chance to chase a move up,” Cramer’s team stated.

As of the latest update, Eli Lilly’s stock is priced at around $528, indicating a potential 14% increase to reach the new target. The revised price target is influenced by the company’s recent earnings report and its position as a leading growth story in large-cap pharma. This growth is attributed to the potential of diabetes treatment Mounjaro and Alzheimer's drug donanemab. The company’s valuation at the $600 target is based on 48 times the 2024 earnings estimates of $12.53 per share.

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