Home Depot co-founder Ken Langone stated that Eli Lilly and Co. (NYSE: LLY) could reach a share price of $2,000 within the next three to four years. Speaking on CNBC’s "Squawk Box," Langone noted that the drugmaker is currently challenging Home Depot as his largest personal investment holding.
Langone said Eli Lilly is giving Home Depot a "real run" for the top spot in his portfolio. He predicted, "I think Lilly’s going to be a $2,000 stock in the next 3 or 4 years." This target represents a 70.92% increase over the stock's closing price on Tuesday.
The investor detailed his long-standing connection to the company, which began in 1977 when Eli Lilly acquired IVAC, a medical-device company he controlled, for roughly $50 million in Lilly stock. Langone stated he has held the stock for nearly five decades and purchased additional shares during market pullbacks. He noted that when he acquired his initial stake, the company had a market capitalization of $2 billion, compared to nearly $1 trillion today.
Attributing his valuation target to leadership and sustained research spending, Langone credited Chairman and CEO David Ricks and Head of R&D Dan Skovronsky with expanding the drugmaker’s pipeline. He highlighted an annual research budget of $17 billion to $18 billion, stating, "They’re not relying completely on these weight loss drugs." Langone added that the company is building a "fortress" in other areas and that "the best is yet to come." He also referenced a $6.5 billion facility in Houston, Texas, announced by CEO Ricks to manufacture synthetic active pharmaceutical ingredients for oral GLP-1 medicines.
Regarding market performance, Eli Lilly stock closed 0.45% higher at $1,170.14 on Tuesday. The stock was up 55.00% over the last year and 8.88% year-to-date, though it was 6.79% lower over the last month.
