Eli Lilly and Company LLY has announced a significant $15 billion share repurchase program. This decision follows the completion of a previous $5 billion buyback initiative in the fourth quarter of 2024.
What Happened: The company’s board has also approved a 15% increase in its quarterly dividend for the seventh consecutive year, setting the dividend at $1.50 per share for the first quarter of 2025. This dividend will be payable on Mar. 10, 2025, to shareholders recorded by Feb. 14, 2025.
According to the announcement, the share repurchase program allows for flexibility in purchasing methods, including open market and privately negotiated transactions. There is no set expiration for this program, and it may be paused or stopped at any time. This strategic move comes as Eli Lilly shares have surged over 35% year-to-date, as per Benzinga Pro.
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Moreover, analysts have set a consensus price target of $941.38 for Eli Lilly, with Citigroup‘s high target of $1250 and Credit Suisse‘s low of $580. Recent ratings from Wolfe Research, Deutsche Bank, and Barclays suggest an average price target of $996.67, indicating a potential 23.13% upside.
Why It Matters: The announcement of the $15 billion share buyback and dividend increase comes on the heels of Eli Lilly’s recent $3 billion expansion of its Kenosha County, Wisconsin, manufacturing facility. This expansion is part of a broader $23 billion investment in production capabilities, aimed at meeting the growing demand for diabetes, obesity, and pipeline medications. The investment is expected to create 750 advanced manufacturing jobs, further strengthening Wisconsin’s pharmaceutical industry.
Additionally, the surge in Eli Lilly shares can be attributed to the increasing demand for its weight loss drugs, such as Mounjaro and Zepbound. According to GoodRx’s Weight Loss Medications Tracker, there has been a significant rise in the use of these medications, despite limited insurance coverage and high out-of-pocket costs.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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