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LLY Trading Above 50 & 200-Day SMAs for 2 Months: How to Play the Stock
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Key Takeaways
Lilly has traded above its 50- and 200-day SMAs since October, followed by a November golden cross.
Solid Q3 results and strong Mounjaro and Zepbound demand have powered Lilly's continued gains.
Expanded launches, new drug approvals and a broad obesity pipeline support Lilly's growth outlook.
Eli Lilly and Company’s (LLY - Free Report) stock has been consistently trading above its 50-day and 200-day simple moving averages (SMAs) since early October.
The 50-day moving average is a short-term indicator, while the 200-day moving average is a longer-term indicator. When the 50-day moving average exceeds the 200-day moving average on a stock’s price chart, it's known as a "golden cross," a signal of a prolonged upward trend. The crossover indicates that the stock's recent price performance has been stronger than its longer-term performance.
LLY stock's most recent golden cross occurred around early November. The company's solid third-quarter results, with higher-than-expected revenues and earnings per share, along with a guidance raise, prompted a rally in its shares. The 50-day SMA has been higher than the 200-day SMA since then, a positive sign for the stock’s future gains.
Image Source: Zacks Investment Research
Let’s understand Lilly’s strengths and weaknesses to better analyze how to play the stock as it has been trading above this important support level.
LLY’s Top Line Thrives on Strong Growth of Mounjaro and Zepbound
Lilly boasts a robust portfolio of treatments for diabetes and other cardiometabolic conditions, with its cardiometabolic division emerging as the company’s strongest segment. This success is largely attributed to its widely used GLP-1 therapies — Mounjaro for diabetes and Zepbound for weight loss. Mounjaro is the most widely prescribed incretin for type II diabetes in the United States, while Zepbound also holds a leading market share in the anti-obesity market.
Despite being on the market for only around three years, Mounjaro and Zepbound have become key top-line drivers for Lilly, with demand rising rapidly. These therapies account for more than 50% of the company’s total revenues.
Launches of Mounjaro and Zepbound in new international markets and improved supply from ramped-up production in the United States have led to strong sales growth in 2025. Mounjaro and Zepbound are expected to continue to see strong demand in 2026. Regulatory approvals for new indications and improved production capacity are expected to boost sales further.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s (NVO - Free Report) semaglutide medicines, Ozempic for diabetes and Wegovy for obesity.
Lilly’s Broad Obesity Pipeline
Lilly is investing broadly in obesity and has several new molecules currently in clinical development with a range of oral and injectable medications with different mechanisms of action. These include two late-stage candidates, orforglipron, a once-daily oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist and some mid-stage candidates, bimagrumab, eloralintide and mazdutide.
Lilly has announced positive data across six studies on orforglipron in obesity and type II diabetes. An oral pill like orforglipron has the potential to be a more convenient alternative to injectable treatments like Zepbound and Wegovy. Lilly plans to file regulatory applications for orforglipron in obesity later this year, setting up the timeline for a potential launch next year. For the type II diabetes indication, Lilly plans to file regulatory applications in the first half of 2026.
It is also evaluating orforglipron in late-stage studies in other disease areas like obstructive sleep apnea, osteoarthritis pain of the knee, stress urinary incontinence and hypertension. It also expects the first data readout from a phase III study on its triple-acting incretin, retatrutide, in osteoarthritis of the knees later in 2025.
LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it announced several M&A deals. It acquired Verve Therapeutics to add gene therapies for heart disease to its pipeline. Lilly also acquired Scorpion Therapeutics’ oncology drug and SiteOne Therapeutics’ non-opioid pain candidate.
In October, Lilly announced a definitive agreement to acquire Adverum Biotechnologies (ADVM - Free Report) , which will add the latter’s lead candidate, Ixo-vec, an intravitreal single-administration gene therapy being developed in phase III to treat vision loss associated with wet age-related macular degeneration. Ixo-vec has the potential to transform chronic eye care into a one-time treatment.
New Drugs Also Contributing to LLY’s Growth
In addition to Mounjaro and Zepbound, Lilly has secured approvals for several other new therapies over the past few years. These include Omvoh for treating ulcerative colitis and Crohn’s disease, BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia, Ebglyss for moderate-to-severe atopic dermatitis, and Kisunla (donanemab) for early symptomatic Alzheimer’s disease. These newly approved drugs are also contributing to Lilly’s revenue growth.
Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2026.
Competition Heating Up in the Obesity Space
The obesity market is expected to expand to $100 billion by 2030, according to data from Goldman Sachs, which means fierce competition is inevitable. Lilly and Novo Nordisk presently dominate the market.
Several other companies, like Amgen and Viking Therapeutics (VKTX - Free Report) , are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity.
NVO, LLY and VKTX are racing to introduce oral weight-loss pills, as Wegovy and Zepbound are both injectable drugs. Novo Nordisk has already filed regulatory applications for an oral version of Wegovy in the United States and the EU and also has several next-generation candidates in its obesity pipeline, like CagriSema (a combination of semaglutide and cagrilintide) and an oral pill, amycretin (a dual GLP-1 and amylin receptor agonist). The FDA is expected to decide on the Wegovy oral formulation NDA later this year.
Others like Roche, Merck and AbbVie are also looking to enter the obesity space by in-licensing obesity candidates from smaller biotechs, which could threaten Novo Nordisk and Eli Lilly’s dominance in the market. Pfizer, last month, acquired obesity drugmaker Metsera to gain a foothold in the obesity space.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has risen 33.8% so far this year compared with the industry’s increase of 15.5%. The stock has also outperformed the Medical sector and the S&P 500 index, as seen in the chart below.
LLY Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, LLY’s shares currently trade at 32.11 forward earnings, much higher than 16.91 for the industry. However, LLY’s stock is trading below its 5-year mean of 34.54.
LLY Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 has risen from $23.10 per share to $23.91 per share over the past 60 days, while that for 2026 has risen from $30.84 to $33.36 per share over the same timeframe.
LLY Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in LLY Stock
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Potential competition in the GLP-1 diabetes/obesity market is a key headwind.
However, exceptional growth from Mounjaro and Zepbound made it the largest drugmaker. In late November, Eli Lilly became the first drugmaker to hit a $1 trillion market cap due to strong performance in 2025, driven by strong demand trends of its GLP-1 drugs. On Nov. 12, its stock reached a new high, topping the $1000-per-share mark and has been trading above this level since then.
Despite its expensive valuation, Lilly is a great stock to have in one’s portfolio, considering its product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment. Consistently rising estimates also reflect analysts’ optimistic outlook for the stock.
Image: Bigstock
LLY Trading Above 50 & 200-Day SMAs for 2 Months: How to Play the Stock
Key Takeaways
Eli Lilly and Company’s (LLY - Free Report) stock has been consistently trading above its 50-day and 200-day simple moving averages (SMAs) since early October.
The 50-day moving average is a short-term indicator, while the 200-day moving average is a longer-term indicator. When the 50-day moving average exceeds the 200-day moving average on a stock’s price chart, it's known as a "golden cross," a signal of a prolonged upward trend. The crossover indicates that the stock's recent price performance has been stronger than its longer-term performance.
LLY stock's most recent golden cross occurred around early November. The company's solid third-quarter results, with higher-than-expected revenues and earnings per share, along with a guidance raise, prompted a rally in its shares. The 50-day SMA has been higher than the 200-day SMA since then, a positive sign for the stock’s future gains.
Let’s understand Lilly’s strengths and weaknesses to better analyze how to play the stock as it has been trading above this important support level.
LLY’s Top Line Thrives on Strong Growth of Mounjaro and Zepbound
Lilly boasts a robust portfolio of treatments for diabetes and other cardiometabolic conditions, with its cardiometabolic division emerging as the company’s strongest segment. This success is largely attributed to its widely used GLP-1 therapies — Mounjaro for diabetes and Zepbound for weight loss. Mounjaro is the most widely prescribed incretin for type II diabetes in the United States, while Zepbound also holds a leading market share in the anti-obesity market.
Despite being on the market for only around three years, Mounjaro and Zepbound have become key top-line drivers for Lilly, with demand rising rapidly. These therapies account for more than 50% of the company’s total revenues.
Launches of Mounjaro and Zepbound in new international markets and improved supply from ramped-up production in the United States have led to strong sales growth in 2025. Mounjaro and Zepbound are expected to continue to see strong demand in 2026. Regulatory approvals for new indications and improved production capacity are expected to boost sales further.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s (NVO - Free Report) semaglutide medicines, Ozempic for diabetes and Wegovy for obesity.
Lilly’s Broad Obesity Pipeline
Lilly is investing broadly in obesity and has several new molecules currently in clinical development with a range of oral and injectable medications with different mechanisms of action. These include two late-stage candidates, orforglipron, a once-daily oral GLP-1 small molecule, and retatrutide, a GGG tri-agonist and some mid-stage candidates, bimagrumab, eloralintide and mazdutide.
Lilly has announced positive data across six studies on orforglipron in obesity and type II diabetes. An oral pill like orforglipron has the potential to be a more convenient alternative to injectable treatments like Zepbound and Wegovy. Lilly plans to file regulatory applications for orforglipron in obesity later this year, setting up the timeline for a potential launch next year. For the type II diabetes indication, Lilly plans to file regulatory applications in the first half of 2026.
It is also evaluating orforglipron in late-stage studies in other disease areas like obstructive sleep apnea, osteoarthritis pain of the knee, stress urinary incontinence and hypertension. It also expects the first data readout from a phase III study on its triple-acting incretin, retatrutide, in osteoarthritis of the knees later in 2025.
LLY is also working to diversify beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas. In 2025, it announced several M&A deals. It acquired Verve Therapeutics to add gene therapies for heart disease to its pipeline. Lilly also acquired Scorpion Therapeutics’ oncology drug and SiteOne Therapeutics’ non-opioid pain candidate.
In October, Lilly announced a definitive agreement to acquire Adverum Biotechnologies (ADVM - Free Report) , which will add the latter’s lead candidate, Ixo-vec, an intravitreal single-administration gene therapy being developed in phase III to treat vision loss associated with wet age-related macular degeneration. Ixo-vec has the potential to transform chronic eye care into a one-time treatment.
New Drugs Also Contributing to LLY’s Growth
In addition to Mounjaro and Zepbound, Lilly has secured approvals for several other new therapies over the past few years. These include Omvoh for treating ulcerative colitis and Crohn’s disease, BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia, Ebglyss for moderate-to-severe atopic dermatitis, and Kisunla (donanemab) for early symptomatic Alzheimer’s disease. These newly approved drugs are also contributing to Lilly’s revenue growth.
Lilly expects its new drugs, Mounjaro, Zepbound, Omvoh, Jaypirca, Ebglyss and Kisunla, along with the expanded use of existing drugs, to drive sales growth in 2026.
Competition Heating Up in the Obesity Space
The obesity market is expected to expand to $100 billion by 2030, according to data from Goldman Sachs, which means fierce competition is inevitable. Lilly and Novo Nordisk presently dominate the market.
Several other companies, like Amgen and Viking Therapeutics (VKTX - Free Report) , are also making rapid progress in the development of more potent and convenient GLP-1-based candidates in their clinical pipeline.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity.
NVO, LLY and VKTX are racing to introduce oral weight-loss pills, as Wegovy and Zepbound are both injectable drugs. Novo Nordisk has already filed regulatory applications for an oral version of Wegovy in the United States and the EU and also has several next-generation candidates in its obesity pipeline, like CagriSema (a combination of semaglutide and cagrilintide) and an oral pill, amycretin (a dual GLP-1 and amylin receptor agonist). The FDA is expected to decide on the Wegovy oral formulation NDA later this year.
Others like Roche, Merck and AbbVie are also looking to enter the obesity space by in-licensing obesity candidates from smaller biotechs, which could threaten Novo Nordisk and Eli Lilly’s dominance in the market. Pfizer, last month, acquired obesity drugmaker Metsera to gain a foothold in the obesity space.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has risen 33.8% so far this year compared with the industry’s increase of 15.5%. The stock has also outperformed the Medical sector and the S&P 500 index, as seen in the chart below.
LLY Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, LLY’s shares currently trade at 32.11 forward earnings, much higher than 16.91 for the industry. However, LLY’s stock is trading below its 5-year mean of 34.54.
LLY Stock Valuation
The Zacks Consensus Estimate for 2025 has risen from $23.10 per share to $23.91 per share over the past 60 days, while that for 2026 has risen from $30.84 to $33.36 per share over the same timeframe.
LLY Estimate Movement
Stay Invested in LLY Stock
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Potential competition in the GLP-1 diabetes/obesity market is a key headwind.
However, exceptional growth from Mounjaro and Zepbound made it the largest drugmaker. In late November, Eli Lilly became the first drugmaker to hit a $1 trillion market cap due to strong performance in 2025, driven by strong demand trends of its GLP-1 drugs. On Nov. 12, its stock reached a new high, topping the $1000-per-share mark and has been trading above this level since then.
Despite its expensive valuation, Lilly is a great stock to have in one’s portfolio, considering its product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment. Consistently rising estimates also reflect analysts’ optimistic outlook for the stock.
Investors who own this Zacks Rank #3 (Hold) stock should retain it. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.