The firm also raised the Indianapolis-based pharmaceutical company's price target to $95 from $89.
Eli Lilly is entering a long-lasting period of accelerating revenue and earnings growth due to its diversified pipeline, Goldman noted. Eli Lilly's Alzheimer's drug, called Sola, could be a "very valuable asset" if it works, the firm said.
Even if the company's Alzheimer's drug is unsuccessful, the firm said that Eli Lilly could see double-digit earnings growth over the next five years and growth within the high-single digits through 2025 due to its durable franchises.
Goldman predicts $12.5 billion of new product sales by 2020, not including the company's Alzheimer's drug.
"While Sola is a risky asset, our bull case scenario could lead to almost $7.5 billion in peak sales and super charge LLY's earnings profile," the firm added. "While it is not on our style to recommend buying in front of such a risky event, what's changed is our increased confidence in the LLY story without Sola."
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Eli Lilly as a Buy with a ratings score of B+. This is driven by a few notable strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. The team feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: LLY