Why Eli Lilly Stock Topped the Market Today

Eli Lilly (NYSE: LLY) stock was the picture of health on Friday. Shares of the massive American pharmaceutical company rose by more than 2% on the day, thanks largely to news from a rival. That performance was in contrast to the S&P 500's (SNPINDEX: ^GSPC) trajectory; the closely watched index sank marginally by 0.3%.

Weight loss leads to gain in bullishness

Eli Lilly's small pop was due to the latest developments in the lab reported by Novo Nordisk (NYSE: NVO), which, like the U.S. company, is doing brisk business with a weight loss drug: Wegovy, which competes directly with Eli Lilly's Zepbound.

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On Friday morning, Novo Nordisk unveiled the latest results from a clinical trial of CagriSema, an investigational drug leveraging the foundational semaglutide molecule used in Wegovy. Participants in the 36-week trial experienced a nearly 10% reduction in body fat, on average. Gastrointestinal side effects were merely mild to moderate, according to the company.

This weight loss, and the speed at which the drug took effect, were quite encouraging. This indicates there remains much potential in the molecules used as the basis for obesity drugs -- semaglutide for Novo Nordisk, and tirzepatide in the case of Eli Lilly.

An analyst weighs in

Waxing bullish about the effects of Novo Nordisk's latest findings on Eli Lilly sentiment was Bank of America Securities analyst Tim Anderson. On the back of those clinical trial results, he felt compelled to reiterate his buy recommendation on the latter company on Friday. He also maintained his $977 per-share price target.

Of the two stocks, Eli Lilly looks better poised to benefit from the current weight-loss drug craze. Tirzepatide is a very effective molecule and, as a result, Zepbound has been a hot seller for the company. If any pharmaceutical producer is going to exploit the full potential of such medications, it's the well-capitalized Eli Lilly. I would even consider it to be a leading healthcare stock appropriate for any portfolio at this point.

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Bank of America is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.