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Eli Lilly (LLY - Free Report) and Merck (MRK - Free Report) are leading global pharmaceutical companies with blockbuster drug portfolios and promising pipelines. Both have a strong presence in oncology, immunology and neuroscience.
Lilly has established a leadership position in cardiometabolic health, with its GLP-1 drugs Mounjaro and Zepbound contributing around 65% of total revenues. Merck, meanwhile, relies heavily on oncology, with its blockbuster cancer drug Keytruda accounting for around 55% of pharmaceutical sales.
Which stock offers a more attractive investment opportunity today? A comparison of their fundamentals, growth prospects and key challenges can help investors assess their relative appeal.
The Case for Lilly Stock
Lilly has seen extraordinary momentum in its cardiometabolic franchise. Its blockbuster drugs, Mounjaro for type II diabetes and Zepbound for obesity, have become some of the fastest-growing medicines in pharmaceutical history, gaining from enormous global demand for GLP-1 therapies. These therapies have become key top-line drivers for Lilly, with demand rising rapidly. In the first half of 2026, the drugs generated combined sales of $27.6 billion.
Lilly’s newly launched once-daily oral GLP-1 pill, Foundayo (orforglipron), for treating obesity could be a commercial game-changer for Lilly. Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Zepbound and rival Novo Nordisk’s (NVO - Free Report) Wegovy. Foundayo's launch uptake has been encouraging as Lilly expands physician engagement and direct-to-consumer promotion in the United States.
To maintain leadership in the GLP-1 market, Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates. Retatrutide is one of Lilly’s most important late-stage pipeline candidates, targeting GLP-1, GIP and glucagon pathways and potentially delivering greater weight loss and broader metabolic benefits than current therapies. With late-stage studies spanning obesity, type II diabetes, obstructive sleep apnea (OSA) and other indications, Lilly plans to seek FDA approval in the first quarter of 2027, potentially creating another multibillion-dollar growth driver.
Lilly’s growth story is increasingly diversifying beyond its GLP-1 franchise, with newer therapies such as Omvoh, Jaypirca, Ebglyss, Kisunla and Inluriyo gaining traction across multiple therapeutic areas. These products are becoming meaningful growth contributors.
The company has also embarked on an aggressive M&A spree in the past couple of years, acquiring biotech companies across oncology, neuroscience, cardiovascular disease, gene editing, inflammation, cell therapy and vaccines to diversify its long-term growth drivers beyond GLP-1 therapies. The company has announced around 10 small biotech M&A deals this year.
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Price is expected to continue to be a drag on top-line growth in the low- to mid-teens percentage in 2026. Rising competition in the GLP-1 diabetes/obesity market is a key headwind. Also, sales of late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat to down in 2026.
The Case for MRK Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancers, has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
Merck expects Keytruda to achieve peak sales of $35 billion by 2028. The company is working on different strategies to drive Keytruda's long-term growth. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors. In partnership with Moderna (MRNA - Free Report) , Merck is developing a personalized mRNA therapeutic cancer vaccine called intismeran autogene in combination with Keytruda in pivotal phase III studies for earlier-stage and adjuvant NSCLC and adjuvant melanoma. The combo therapy recently met both primary and secondary endpoints in a phase III study in certain patients with high-risk melanoma.
Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
MRK’s Animal Health business also contributes to top-line growth, with sales expected to more than double by the mid-2030s.
The company’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging. Its late-stage pipeline has expanded substantially since 2021, supported by in-house progress as well as the addition of candidates through M&A deals.
Its new products, pulmonary arterial hypertension drug Winrevair, cancer drug Welireg and 21-valent pneumococcal conjugate vaccine, Capvaxive, have begun to contribute significantly to top-line growth. Merck expects to launch 20 new drugs by 2030, with many already launched.
Merck is actively pursuing acquisitions to prepare for Keytruda’s 2028 patent expiration. Recent deals added Ohtuvayre through Verona Pharma, influenza candidate MK-1406 through Cidara, and potential blockbuster cancer drug MK-4208 through Terns Pharmaceuticals.
However, sales of Merck’s second-largest product, its HPV vaccine Gardasil, have slowed down. Sales declined 9% in the first half of 2026 amid weaker demand in China, Japan and the United States. The outlook remains challenging, particularly in China, where economic weakness, elevated channel inventories and growing competition from lower-cost domestic HPV vaccines are expected to keep 2026 revenues immaterial. Changes in U.S. vaccination recommendations are also weighing on demand.
Merck is heavily reliant on Keytruda. While Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring shortly thereafter. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter the market, Keytruda’s sales are likely to decline sharply.
Merck faces continued revenue pressure from declining demand for its diabetes drugs Januvia/Janumet and increasing generic erosion across products such as Isentress/Isentress HD, Bridion and Dificid.
How Do Estimates Compare for MRK & LLY?
The Zacks Consensus Estimate for LLY’s 2026 sales and EPS implies a year-over-year increase of 36.5% and 37.2%, respectively. The Zacks Consensus Estimate for 2026 has declined from $36.66 to $33.22 per share over the past 30 days, while that for 2027 has risen from $46.75 to $47.23 per share over the same timeframe.
LLY Estimate Movement
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MRK’s 2026 sales implies a year-over-year increase of 3.2%, while EPS is expected to decline 70.5%. Estimates for MRK’s 2026 earnings have declined from $2.77 to $2.65 per share over the past 30 days, while those for 2027 have declined from $9.61 per share to $9.26 per share.
MRK Estimate Movement
Image Source: Zacks Investment Research
Price Performance and Valuation of LLY & MRK
Year to date, LLY stock has risen 18.5%, while Merck stock has risen 38.0%. The industry has risen 17.2% in the said time frame.
Image Source: Zacks Investment Research
MRK looks more attractive than Lilly from a valuation standpoint. Going by the price/earnings ratio, Lilly’s shares currently trade at 28.49 forward earnings, higher than 19.03 for the industry. However, the stock is trading below its 5-year mean of 34.57. Merck’s shares currently trade at 18.02 forward earnings, slightly lower than the industry but above the stock’s 5-year mean of 13.14.
Image Source: Zacks Investment Research
Merck’s dividend yield is 2.3%, while Lilly’s is around 0.5%.
LLY or MRK: Which is a Better Pick?
Lilly has a Zacks Rank #3 (Hold), while Merck has a Zacks Rank #5 (Strong Sell), making the former the clear winner.
Merck has one of the world’s best-selling drugs in its portfolio — Keytruda — generating billions of dollars in revenues. Merck’s new products, strong progress in its pipeline, and business development and acquisitions have increased confidence that Merck may be able to maintain long-term growth even after Keytruda loses exclusivity. However, Merck’s several challenges, including Keytruda’s upcoming LOE cliff, persistent challenges for Gardasil, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs, cloud near-term growth prospects. Also, estimates have declined recently due to costs related to its various M&A deals.
Though Merck’s long-term growth outlook seems to be improving, its prospects for growth in the near term are limited.
On the other hand, exceptional growth from Mounjaro and Zepbound has made Lilly the largest drugmaker. Lilly has one of the strongest growth profiles in big pharma. Though not cheap, Lilly is a great stock to have in one’s portfolio, given its product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment, which make it a clear winner over Merck.
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LLY vs. MRK: Which Stock Offers the More Compelling Investment Case?
Key Takeaways
Eli Lilly (LLY - Free Report) and Merck (MRK - Free Report) are leading global pharmaceutical companies with blockbuster drug portfolios and promising pipelines. Both have a strong presence in oncology, immunology and neuroscience.
Lilly has established a leadership position in cardiometabolic health, with its GLP-1 drugs Mounjaro and Zepbound contributing around 65% of total revenues. Merck, meanwhile, relies heavily on oncology, with its blockbuster cancer drug Keytruda accounting for around 55% of pharmaceutical sales.
Which stock offers a more attractive investment opportunity today? A comparison of their fundamentals, growth prospects and key challenges can help investors assess their relative appeal.
The Case for Lilly Stock
Lilly has seen extraordinary momentum in its cardiometabolic franchise. Its blockbuster drugs, Mounjaro for type II diabetes and Zepbound for obesity, have become some of the fastest-growing medicines in pharmaceutical history, gaining from enormous global demand for GLP-1 therapies. These therapies have become key top-line drivers for Lilly, with demand rising rapidly. In the first half of 2026, the drugs generated combined sales of $27.6 billion.
Lilly’s newly launched once-daily oral GLP-1 pill, Foundayo (orforglipron), for treating obesity could be a commercial game-changer for Lilly. Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Zepbound and rival Novo Nordisk’s (NVO - Free Report) Wegovy. Foundayo's launch uptake has been encouraging as Lilly expands physician engagement and direct-to-consumer promotion in the United States.
To maintain leadership in the GLP-1 market, Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates. Retatrutide is one of Lilly’s most important late-stage pipeline candidates, targeting GLP-1, GIP and glucagon pathways and potentially delivering greater weight loss and broader metabolic benefits than current therapies. With late-stage studies spanning obesity, type II diabetes, obstructive sleep apnea (OSA) and other indications, Lilly plans to seek FDA approval in the first quarter of 2027, potentially creating another multibillion-dollar growth driver.
Lilly’s growth story is increasingly diversifying beyond its GLP-1 franchise, with newer therapies such as Omvoh, Jaypirca, Ebglyss, Kisunla and Inluriyo gaining traction across multiple therapeutic areas. These products are becoming meaningful growth contributors.
The company has also embarked on an aggressive M&A spree in the past couple of years, acquiring biotech companies across oncology, neuroscience, cardiovascular disease, gene editing, inflammation, cell therapy and vaccines to diversify its long-term growth drivers beyond GLP-1 therapies. The company has announced around 10 small biotech M&A deals this year.
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Price is expected to continue to be a drag on top-line growth in the low- to mid-teens percentage in 2026. Rising competition in the GLP-1 diabetes/obesity market is a key headwind. Also, sales of late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat to down in 2026.
The Case for MRK Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancers, has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
Merck expects Keytruda to achieve peak sales of $35 billion by 2028. The company is working on different strategies to drive Keytruda's long-term growth. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors. In partnership with Moderna (MRNA - Free Report) , Merck is developing a personalized mRNA therapeutic cancer vaccine called intismeran autogene in combination with Keytruda in pivotal phase III studies for earlier-stage and adjuvant NSCLC and adjuvant melanoma. The combo therapy recently met both primary and secondary endpoints in a phase III study in certain patients with high-risk melanoma.
Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
MRK’s Animal Health business also contributes to top-line growth, with sales expected to more than double by the mid-2030s.
The company’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging. Its late-stage pipeline has expanded substantially since 2021, supported by in-house progress as well as the addition of candidates through M&A deals.
Its new products, pulmonary arterial hypertension drug Winrevair, cancer drug Welireg and 21-valent pneumococcal conjugate vaccine, Capvaxive, have begun to contribute significantly to top-line growth. Merck expects to launch 20 new drugs by 2030, with many already launched.
Merck is actively pursuing acquisitions to prepare for Keytruda’s 2028 patent expiration. Recent deals added Ohtuvayre through Verona Pharma, influenza candidate MK-1406 through Cidara, and potential blockbuster cancer drug MK-4208 through Terns Pharmaceuticals.
However, sales of Merck’s second-largest product, its HPV vaccine Gardasil, have slowed down. Sales declined 9% in the first half of 2026 amid weaker demand in China, Japan and the United States. The outlook remains challenging, particularly in China, where economic weakness, elevated channel inventories and growing competition from lower-cost domestic HPV vaccines are expected to keep 2026 revenues immaterial. Changes in U.S. vaccination recommendations are also weighing on demand.
Merck is heavily reliant on Keytruda. While Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring shortly thereafter. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter the market, Keytruda’s sales are likely to decline sharply.
Merck faces continued revenue pressure from declining demand for its diabetes drugs Januvia/Janumet and increasing generic erosion across products such as Isentress/Isentress HD, Bridion and Dificid.
How Do Estimates Compare for MRK & LLY?
The Zacks Consensus Estimate for LLY’s 2026 sales and EPS implies a year-over-year increase of 36.5% and 37.2%, respectively. The Zacks Consensus Estimate for 2026 has declined from $36.66 to $33.22 per share over the past 30 days, while that for 2027 has risen from $46.75 to $47.23 per share over the same timeframe.
LLY Estimate Movement
The Zacks Consensus Estimate for MRK’s 2026 sales implies a year-over-year increase of 3.2%, while EPS is expected to decline 70.5%. Estimates for MRK’s 2026 earnings have declined from $2.77 to $2.65 per share over the past 30 days, while those for 2027 have declined from $9.61 per share to $9.26 per share.
MRK Estimate Movement
Price Performance and Valuation of LLY & MRK
Year to date, LLY stock has risen 18.5%, while Merck stock has risen 38.0%. The industry has risen 17.2% in the said time frame.
MRK looks more attractive than Lilly from a valuation standpoint. Going by the price/earnings ratio, Lilly’s shares currently trade at 28.49 forward earnings, higher than 19.03 for the industry. However, the stock is trading below its 5-year mean of 34.57. Merck’s shares currently trade at 18.02 forward earnings, slightly lower than the industry but above the stock’s 5-year mean of 13.14.
Merck’s dividend yield is 2.3%, while Lilly’s is around 0.5%.
LLY or MRK: Which is a Better Pick?
Lilly has a Zacks Rank #3 (Hold), while Merck has a Zacks Rank #5 (Strong Sell), making the former the clear winner.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merck has one of the world’s best-selling drugs in its portfolio — Keytruda — generating billions of dollars in revenues. Merck’s new products, strong progress in its pipeline, and business development and acquisitions have increased confidence that Merck may be able to maintain long-term growth even after Keytruda loses exclusivity. However, Merck’s several challenges, including Keytruda’s upcoming LOE cliff, persistent challenges for Gardasil, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs, cloud near-term growth prospects. Also, estimates have declined recently due to costs related to its various M&A deals.
Though Merck’s long-term growth outlook seems to be improving, its prospects for growth in the near term are limited.
On the other hand, exceptional growth from Mounjaro and Zepbound has made Lilly the largest drugmaker. Lilly has one of the strongest growth profiles in big pharma. Though not cheap, Lilly is a great stock to have in one’s portfolio, given its product and pipeline portfolio in high-growth therapeutic areas like obesity, robust growth prospects and bullish analyst sentiment, which make it a clear winner over Merck.