What to Expect From Eli Lilly in 2026? Is LLY Stock a Good Buy Now?

TradingKey - The transformation of Eli Lilly (LLY) from a recognized name in the pharmaceutical industry to a market leader is attributed to its GLP-1 franchise products. Both Zepbound and Mounjaro treat obesity and diabetes, respectively, and are expected to drive billions in sales and significantly alter the growth profile of the company. Such company performance has recently resulted in Eli Lilly stocks attaining a premium value, even leading it to surpass the $1 trillion market capitalization.

The company’s main goal and focus in 2026 will be to maintain its leadership position in weight management, whilst expanding further into additional therapeutic areas, so that revenue growth will not be dependent on a singular product. It is expected that Eli Lilly’s stocks will serve as a predictor to the adoption of GLP-1–based therapies. Eli Lilly is making significant investments in the areas of Alzheimer’s disease, oncology, immunology, and the emerging field of genetic medicines, and these will likely be considered in stock predictions.

Investors Are Waiting For the Approval of the Weight Loss Pill, Orforglipron

The FDA will decide on orforglipron (Eli Lilly’s oral GLP-1 for weight loss and diabetes) by April 10, which seems to be procedural as there are no reported safety or efficacy concerns. This pill is a significant option because it provides a convenient oral alternative to injectables, thereby expanding access and adherence among patients. This would be important because with this pill as a convenient option via oral route vs. injectable, it expands access and compliance among patients who have limited access due to lack of knowledge or experience. And doing well in late-stage trials compared to other GLP-1s with a greater rate (meaningful at approx. 12% avg weight loss) than other GLP-1 types (at approximately 72 wks), orforglipron has outperformed any oral/conventional methods available today including those producing less than 10% avg loss.

Despite having the first to market, Novo Nordisk (NVO) was able to establish itself as the leading company by using its injectables and did not require "first-mover" status. Also with that being said, if Lilly achieves a safe and effective trial(s) and maintains affordable prices at the large scale, then Lilly will not have to worry about any first epiphany on its orforglipron to maintain its advantage in market presence of any type of GLP-1 (oral injectable) products.

Investors need to keep an eye on retatrutide, the triple-agonist candidate which achieved an eye-popping 28.7% mean weight loss at the high dose in a Phase 2 trial. If late-stage results continue to hold up and regulatory review goes smoothly, retatrutide could be on the market by the end of 2026, allowing Eli Lilly to serve patients with higher body mass who require more potent therapy. Between a potential orforglipron launch and retatrutide approval, Eli Lilly would have a differentiated portfolio across shots and pills that addresses various patient segments.

How Can Lilly Compete With Novo Nordisk

Novo Nordisk is the only other competitor who is comparable to Eli Lilly in size. The Wegovy product from Novo is an accepted and demanded anti-obesity medication, and the company is in the process of attaining other approvals as well, including a higher dose of semaglutide and an oral form of Wegovy to be marketed in the U.S. Novo also has near-term candidates such as amylin agonists and long-acting GLP-1/GIP therapies (CagriSema), which have shown an average weight loss of 15.6% in clinical trials.

However, Eli Lilly's Zepbound has outperformed Wegovy in head-to-head trials, and Eli Lilly's Zepbound generated $9.3 billion in total revenue through the first nine months of 2025, which is either equal to or greater than Wegovy's revenue, despite receiving its U.S. approval later. Eli Lilly is also developing orforglipron and retatrutide to address both routes of administration and is expanding its focus from GLP-1/GIP to other hormone systems. Based on the data and broad product base, Eli Lilly's stock appears to have a stronger product mix with better efficacy than Novo's stock; however, Novo's effective execution should not be overlooked.

Lilly's Exploration Beyond Obesity

Long-term growth isn't just about obesity; Kisunla has positioned Lilly's company as being there for those with Alzheimer's who have the potential for even small incremental gains to make a large impact (both patient and payer). Verzenio continues to lead sales in breast cancer (oncology), demonstrating Lilly's strength within the oncology space. Lilly is demonstrating that Taltz and Omvoh can compete in chronic inflammatory conditions and build durable franchises in FY 2026 (immunology). All of the above are cases of revenue diversification and are a hedge against slowing down in any one market.

Lilly is also investing in genetic medicine. To utilize genetic medicine, Lilly entered into a $1.12 billion collaboration agreement with Seamless Therapeutics for developing programmable recombinases-based treatments for hearing loss. Lilly has previously acquired Verve Therapeutics for gene-editing-based cardiovascular disease treatments. This segment is at an early stage of development; therefore, investors should not expect any blockbusting (significant) revenue from this segment in the near term, but it is expected that Lilly’s clinical leverage and cash resources will help to build the next cycle of growth for Lilly from non-GLP-1 products late this decade.

Lilly's Strong Behaviors in Financials

Recent results demonstrate the effectiveness of the current portfolio. In Q3, revenue increased 54% year over year to $17.6 billion, and adjusted net income was $6.3 billion ($1.1 billion YoY) for Eli Lilly's September 2025 cash balance of approximately $9.8 billion—enabling them to invest in manufacturing capacity and supply chain resilience as well as enter into pipeline partnerships. The dividend yield is approximately 0.6% on a forward basis, but the payout has doubled from 2020 to now, illustrating their focus on returning cash to investors as they grow.

Valuation is key for the stock price today. On trailing earnings, the stock has traded greater than 50x and on forward estimates approximately 32x vs. the healthcare sector average of ~18x. The PEG ratio is 1, so the growth in expected revenue through growth equity supports a premium price if the company is able to execute successfully. The market has essentially paid for ongoing double-digit (20-30%) growth in revenues and profits from the GLP-1 era franchise; additional revenues/profits will come from a much broader range of services related to the GLP-1s and pipeline support developed by 2026.

What 2026 Could Look Like for Lilly

The target date for orforglipron's final FDA approval will be April 10th, which means that orforglipron would begin contributing to revenue within the second half of the year if it is granted approval. If retatrutide continues to produce good data and meets its expected approval timeline, it may launch by the end of the year as well and may help affirm Lilly's position as a leader in this market. A stock split could happen due to the current high share price and management's confidence in their long-term growth potential. Although a stock split would not impact any of Lilly's underlying financial fundamentals, it may provide increased retail investor participation and improve liquidity.

The primary risks we see for Lilly's stock are increased competition from other companies, supply shortages since demand may potentially exceed supply, and stricter coverage criteria or pre-authorization processes put into place by payers. Each of these risks could create a level of volatility on a quarterly basis but do not alter the overall demand for effective, well-tolerated prescription weight management products over the long term.

Is Eli Lilly Stock a Buy Now?

Eli Lilly is still growing rapidly, and there are milestones in 2026 that will help Eli Lilly to continue to lead the way in weight management. In addition, Eli Lilly can also offer significant contributions towards Alzheimer's, oncology, and immunology, and has begun to enter into the genetic medicine space which, at this time, could yield more value.

Valuation-wise, there are many things that support Lilly being very rich when compared to Novo Nordisk; however, the company's growth profile, profit-generating ability, and depth of its pipeline provide valid reasons for a premium.

For those who already own Lilly shares, this setup continues to warrant a long-term buy. For those considering whether or not to purchase Lilly, there is still an opportunity to obtain Lilly shares at an attractive valuation if those investors are sized to understand that there is valuation risk associated with Lilly and that there are opportunities created by stock price movements related to headlines; so as you see an opportunity due to headline-driven declines in share price (such as delays related to regulatory approvals, or near-term capacity announcements), consider looking for better entry points. In the case of long-term investors willing to accept short-term volatility, the company's scale, pipeline robustness, and financial flexibility give those investors a good long-term core healthcare equity holding in Lilly.

2026 will be an important year with a likely launch of an oral GLP-1 product and possible late-2026 approval of retatrutide. Currently, Eli Lilly continues to have a performance and pipeline edge over its competitor, Novo Nordisk. The stock is not cheap; however, there is a pathway for the company to earn a premium in growth supported by the company's growth projections.