Eli Lilly's stock has experienced a notable upward trajectory, fueled by impressive sales figures from its GLP-1 class weight-loss pharmaceuticals, Mounjaro and Zepbound. The pharmaceutical giant's positive financial outlook for 2026, alongside the impending introduction of an innovative oral GLP-1 medication, orforglipron, firmly establishes its dominance in the expanding weight management sector. This analysis delves into whether the current momentum of Eli Lilly presents an attractive investment proposition for stakeholders.
The recent surge in Eli Lilly's share price is directly attributable to the robust performance of its GLP-1 drug portfolio. In the fourth quarter, Mounjaro's sales saw a remarkable 110% increase, reaching $7.4 billion, while Zepbound's revenue escalated by an impressive 123% to $4.3 billion compared to the previous year. Both Mounjaro and Zepbound, despite sharing the active ingredient tirzepatide, received distinct regulatory approvals: Mounjaro for type 2 diabetes management and Zepbound for weight loss in adults with obesity or weight-related conditions. However, both are frequently prescribed off-label for weight reduction. This strong demand has significantly contributed to the company's financial success.
Eli Lilly's overall financial results for the fourth quarter demonstrated substantial growth, with total revenue climbing 43% to $19.29 billion, and adjusted earnings per share (EPS) rising 42% to $7.54. These figures comfortably surpassed analyst consensus estimates, which projected adjusted EPS of $6.67 on sales of $17.96 billion. Looking ahead, the company has provided an optimistic revenue forecast for 2026, ranging from $80 billion to $83 billion, indicating a 25% growth at the midpoint. Furthermore, adjusted EPS is anticipated to be between $33.50 and $35, exceeding the consensus expectation of $33.23 EPS on sales of $77.72 billion.
The optimistic projections for 2026 are largely based on the sustained high demand for Mounjaro and Zepbound, with potential further boosts from Medicare coverage later this year. A pivotal development is the expected second-quarter approval of orforglipron, Eli Lilly's forthcoming GLP-1 blockbuster drug for obesity, which will be available in an oral pill form. This oral administration method is set to revolutionize the market, appealing to individuals averse to injections and simplifying logistics as it eliminates the need for specialized pens or cold storage, thus facilitating a faster market rollout.
Eli Lilly maintains a commanding presence in the weight-loss drug market, with orforglipron's approval poised to be a significant catalyst for growth in the coming years. The drug's initial launch in the U.S. and select international markets this year, followed by a broader global expansion in 2027, is expected to further solidify the company's position. While the stock currently trades at a forward price-to-earnings (P/E) ratio of 33 times 2026 estimates, this figure is projected to decrease to below 27 times based on 2027 consensus forecasts. Considering the robust growth potential within the GLP-1 segment and the strategic advantage offered by orforglipron, the stock's positive momentum appears sustainable, suggesting it remains a viable investment option.
Eli Lilly's strategic advancements in the GLP-1 market, particularly with the introduction of its oral weight-loss drug, highlight a compelling narrative for investors. The company's impressive financial performance and promising future outlook underscore its leadership in a rapidly evolving pharmaceutical landscape. With continued innovation and market expansion, Eli Lilly is well-positioned for sustained growth and profitability, offering an intriguing opportunity for those looking to invest in the healthcare sector.
