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LLY Up 28% in 3 Months: Is it the Right Time to Invest in the Stock?
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Key Takeaways
LLY's stock climbed 28% in three months, driven by strong demand for Mounjaro and Zepbound.
Mounjaro and Zepbound generate over half of LLY revenues on global launches and higher U.S. supply.
Lilly's expanding obesity pipeline includes orforglipron and retatrutide.
Eli Lilly and Company’s (LLY - Free Report) stock has risen 28% in the past three months. With exceptional growth from its GLP-1 drugs, Mounjaro and Zepbound, Lilly has become the first and only drugmaker to hit a $1 trillion market cap. The stock has been consistently trading above $1000 per share for around a month and a half now, after it hit the mark in mid-November. The stock is also trading above its 50- and 200-day SMA for more than three months now.
Lilly has become a dominant player in the popular GLP-1 drug space while simultaneously building future growth drivers by acquiring innovative drugs and rapidly advancing its in-house pipeline of novel drugs. The company has consistently delivered strong earnings performance and guidance upgrades. Market analysts have also raised earnings estimates and target prices for LLY’s stock, which also plays a role in pushing the stock up.
Let’s understand Lilly’s strengths and weaknesses to better analyze how to play the stock as it records consistent gains.
Strong Growth of LLY’s GLP-1 Drugs 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 slightly more than 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.
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.
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. A key drug in its obesity pipeline is a once-daily oral GLP-1 small molecule called orforglipron.
Lilly has announced positive data across six studies on orforglipron in obesity and type II diabetes. Lilly filed regulatory applications seeking approval for orforglipron in obesity in December, 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.
Lilly is also evaluating another key candidate, triple-acting incretin, retatrutide (which combines GLP-1, GIP and glucagon), in type II diabetes and obesity, along with other indications like obstructive sleep apnea, knee osteoarthritis and chronic low back pain, in late-stage studies.
Data from a phase III study on retatrutide in obesity and knee osteoarthritis pain showed that the drug delivered significant weight loss with substantial relief from osteoarthritis pain. Lilly expects data readouts from three phase III studies on retatrutide for treating obesity in the second half of 2026.
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. The latest acquisition of Adverum Biotechnologies added 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.
Race to Make Oral Obesity Pill Intensifies
Last month, the FDA approved NVO’s oral version of the obesity drug Wegovy (semaglutide). Wegovy is the first oral GLP-1 drug to be approved in the United States, ushering in a new era of obesity treatment.
Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Lilly’s Zepbound and Novo Nordisk’s Wegovy. Oral pills may significantly lower treatment burden and potentially broaden patient adoption versus injections. Oral pills can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales. Novo Nordisk expects to launch the Wegovy pill in early January 2026.
NVO will also soon advance its next-generation obesity candidate, amycretin, into late-stage development, both as an injection and oral pill. The phase III program on amycretin is planned to be initiated during the first quarter of 2026. Smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity.
Structure Therapeutics’ ACCESS study on its orally GLP-1 RA, aleniglipron, for obesity, met its primary and all key secondary endpoints. In the study, the 120 mg dose delivered an 11.3% placebo-adjusted weight loss. Higher doses drove deeper reductions, reaching 15.3% at 240 mg. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity around mid-2026.
The Wegovy pill gives NVO the first-to-market advantage and will initially bring in additional revenues and hurt Lilly’s market share. However, though NVO has the lead in the oral obesity market, Lilly may be able to close the gap fast once orforglipron is approved by the FDA in 2026. Overall, the obesity market is huge, and we believe that multiple players can co-exist.
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. In November, Pfizer acquired obesity drugmaker Metsera to gain a foothold in the space.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has risen 41.2% in the past year compared with the industry’s increase of 19.4%. 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 32.05 forward earnings, much higher than 17.54 for the industry. However, LLY’s stock is trading below its 5-year mean of 34.57.
LLY Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 has risen from $31.71 to $33.61 per share over the past 60 days.
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. Rising competition in the GLP-1 diabetes/obesity market is a key headwind.
However, exceptional growth from Mounjaro and Zepbound made it the largest drugmaker. Despite its expensive valuation, Lilly is a great stock to have in one’s portfolio, given its significant price appreciation, 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. Its high valuation reflects current top-line strength as well as expectations of future growth. Investors may consider betting on this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
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LLY Up 28% in 3 Months: Is it the Right Time to Invest in the Stock?
Key Takeaways
Eli Lilly and Company’s (LLY - Free Report) stock has risen 28% in the past three months. With exceptional growth from its GLP-1 drugs, Mounjaro and Zepbound, Lilly has become the first and only drugmaker to hit a $1 trillion market cap. The stock has been consistently trading above $1000 per share for around a month and a half now, after it hit the mark in mid-November. The stock is also trading above its 50- and 200-day SMA for more than three months now.
Lilly has become a dominant player in the popular GLP-1 drug space while simultaneously building future growth drivers by acquiring innovative drugs and rapidly advancing its in-house pipeline of novel drugs. The company has consistently delivered strong earnings performance and guidance upgrades. Market analysts have also raised earnings estimates and target prices for LLY’s stock, which also plays a role in pushing the stock up.
Let’s understand Lilly’s strengths and weaknesses to better analyze how to play the stock as it records consistent gains.
Strong Growth of LLY’s GLP-1 Drugs 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 slightly more than 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.
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.
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. A key drug in its obesity pipeline is a once-daily oral GLP-1 small molecule called orforglipron.
Lilly has announced positive data across six studies on orforglipron in obesity and type II diabetes. Lilly filed regulatory applications seeking approval for orforglipron in obesity in December, 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.
Lilly is also evaluating another key candidate, triple-acting incretin, retatrutide (which combines GLP-1, GIP and glucagon), in type II diabetes and obesity, along with other indications like obstructive sleep apnea, knee osteoarthritis and chronic low back pain, in late-stage studies.
Data from a phase III study on retatrutide in obesity and knee osteoarthritis pain showed that the drug delivered significant weight loss with substantial relief from osteoarthritis pain. Lilly expects data readouts from three phase III studies on retatrutide for treating obesity in the second half of 2026.
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. The latest acquisition of Adverum Biotechnologies added 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.
Race to Make Oral Obesity Pill Intensifies
Last month, the FDA approved NVO’s oral version of the obesity drug Wegovy (semaglutide). Wegovy is the first oral GLP-1 drug to be approved in the United States, ushering in a new era of obesity treatment.
Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Lilly’s Zepbound and Novo Nordisk’s Wegovy. Oral pills may significantly lower treatment burden and potentially broaden patient adoption versus injections. Oral pills can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales. Novo Nordisk expects to launch the Wegovy pill in early January 2026.
NVO will also soon advance its next-generation obesity candidate, amycretin, into late-stage development, both as an injection and oral pill. The phase III program on amycretin is planned to be initiated during the first quarter of 2026. Smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity.
Structure Therapeutics’ ACCESS study on its orally GLP-1 RA, aleniglipron, for obesity, met its primary and all key secondary endpoints. In the study, the 120 mg dose delivered an 11.3% placebo-adjusted weight loss. Higher doses drove deeper reductions, reaching 15.3% at 240 mg. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity around mid-2026.
The Wegovy pill gives NVO the first-to-market advantage and will initially bring in additional revenues and hurt Lilly’s market share. However, though NVO has the lead in the oral obesity market, Lilly may be able to close the gap fast once orforglipron is approved by the FDA in 2026. Overall, the obesity market is huge, and we believe that multiple players can co-exist.
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. In November, Pfizer acquired obesity drugmaker Metsera to gain a foothold in the space.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has risen 41.2% in the past year compared with the industry’s increase of 19.4%. 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 32.05 forward earnings, much higher than 17.54 for the industry. However, LLY’s stock is trading below its 5-year mean of 34.57.
LLY Stock Valuation
The Zacks Consensus Estimate for 2026 has risen from $31.71 to $33.61 per share over the past 60 days.
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. Rising competition in the GLP-1 diabetes/obesity market is a key headwind.
However, exceptional growth from Mounjaro and Zepbound made it the largest drugmaker. Despite its expensive valuation, Lilly is a great stock to have in one’s portfolio, given its significant price appreciation, 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. Its high valuation reflects current top-line strength as well as expectations of future growth. Investors may consider betting on this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.