11:44 AM EDT, 08/09/2024 (MT Newswires) -- Eli Lilly and Company ( LLY ) was named "top pick" by Morgan Stanley, who said the drug maker has the "strongest growth profile" within its coverage universe.

"We believe LLY offers the most attractive opportunity in our coverage for upside to consensus estimates, despite the stock's outperformance," Morgan Stanley said in a report Friday.

Following the company's forecast-beating Q2 results, 2024 guidance raise, and commentary on the forward outlook, Morgan Stanley said it now sees "greater levels of upside to our near-term Mounjaro+ Zepbound estimates as well as having greater confidence in the supply outlook."

Eli Lilly's ( LLY ) weight loss drug Zepbound and diabetes treatment Mounjaro are now available in the US in all doses following a shortage, according to the US Food and Drug Administration's updated drug shortage database.

Morgan Stanley said it is now modeling Eli Lilly ( LLY ) reaching greater than 50% operating margins in 2026, instead of 2028 as predicted earlier, "as our increased revenue estimates largely flow through to the bottom line."

The firm also said Eli Lilly ( LLY ) has "the most robust new product cycle and hence growth outlook in Pharma as the company could launch five new drugs over the next two years."

Morgan Stanley reiterated its overweight rating on the stock while raising price target to $1,106 from $1,083.

Shares of Eli Lilly ( LLY ) were up more than 6% in recent trading.

Price: 896.41, Change: +51.10, Percent Change: +6.05