Eli Lilly (LLY) Has Pulled Back Hard, but the GLP-1 Story Is Far from Over

Eli Lilly (LLY) has pulled back sharply, but the glucagon-like peptide-1 (GLP-1) growth story remains intact. The stock’s roughly 16% decline year-to-date looks more like a reset in expectations than a change in fundamentals. No longer just a traditional pharmaceutical company, with leadership in obesity, a deep pipeline, and multiple catalysts still ahead, Lilly continues to stand out as one of the most compelling growth stories in large-cap healthcare.

Lilly is increasingly the dominant platform in the cardiometabolic market, with Zepbound and Mounjaro already driving significant growth, and an oral GLP-1 candidate, orforglipron, potentially opening an even larger addressable market. Add Medicare expansion, international runway, and newer pipeline assets like retatrutide and eloralintide, and I think the market is still underestimating just how durable this growth cycle could be. Being bullish on LLY feels justified now. Even after its run as one of healthcare’s top winners, LLY’s valuation still underprices the full obesity opportunity.

The Core Business Is Still Growing Faster Than the Market Expected

Near-term, Lilly still looks well set up. Ahead of Q1 2026 results, I expect both Zepbound and Mounjaro to come in slightly above Street expectations. That matters because these two products remain the central focus of the stock’s debate.

For Zepbound, the consensus estimate varies but stands at around $4 billion amid robust growth forecasts. Pricing pressures persist, with average revenue per prescription down roughly 17% year-over-year, yet surging prescription volumes more than offset the decline. That is the point I think many investors still miss: Lilly’s growth is increasingly a volume story, not just a pricing story.

Mounjaro looks similar. The consensus estimate is around $7 billion. There is also a Medicare-related tailwind in the quarter because Lilly exits the catastrophic coverage dynamic that weighed on pricing in late 2025. So while there is always noise around rebates and net pricing, the broader message remains intact: demand is strong, and Lilly continues to convert that demand into massive revenue growth.

Orforglipron Could Drive the Next Leg Higher

If I had to point to one reason why I remain bullish despite the stock’s size and prior run, it would be orforglipron. The market clearly understands that Lilly already has a leading obesity franchise. I am less sure the market fully appreciates the potential of an effective oral GLP-1 to expand the category. Injectable drugs like Zepbound and Mounjaro have already proven the appetite for this class. However, an oral option has the potential to unlock a much broader patient base, especially among people who are needle-averse, early in treatment, or outside the U.S.

Orforglipron is expected to launch in Q2 2026, and because it is an oral therapy, cheaper to manufacture, and does not require cold-chain storage, it could be especially well-suited for ex-U.S. markets. The company’s own broader diabesity strategy increasingly looks like a portfolio approach, not a one-product story. In other words, Lilly may not just defend its lead — it may widen it.

Medicare and International Expansion Are Still Underappreciated

Another reason I think the obesity story may still be underestimated is that future demand drivers are not yet fully reflected in the numbers. One major catalyst is the potential expansion of Medicare coverage for obesity drugs. Current consensus estimates imply only around 3% penetration of eligible accessible Medicare lives by 2033.

Then there is ex-U.S. demand. Lilly’s international opportunity is easy to overlook because the U.S. business is already so large, but it may end up being one of the most important growth drivers over time. The ex-U.S. obesity population opportunity is estimated in the hundreds of millions, with early Mounjaro launches showing encouraging demand even in cash-pay settings. That is a very long runway.

Lilly’s Pipeline Extends the Growth Runway

What separates Lilly from many other large pharmaceutical companies’ stories is that it is not relying on one wave of success. The next wave is already forming.

Retatrutide remains a major asset, with Phase 3 obesity data expected in 2026 and strong earlier results that reinforce Lilly’s position at the high end of efficacy in this category. Eloralintide also appears promising in the amylin class. Moreover, beyond obesity, the company still has options in neuroscience and oncology.

This matters because it weakens one of the more common pushbacks on the stock — that expectations are already too high. Yes, expectations are high. However, Lilly also has unusual breadth and patent protection that extends into the mid-2030s and beyond. Lilly can grow revenue at a 14% compound annual growth rate (CAGR) to $130 billion by 2033. Those are bold projections, but they help explain why the multiple remains elevated.

Fair Value

My valuation work supports a constructive stance. Based on 13 valuation models, including a multi-stage dividend discount model, price-to-earnings multiples, and a 10-year discounted cash flow (DCF) revenue exit, I calculated Eli Lilly’s fair value at around $1,050 per share, implying around 13% upside from the current stock price.

Wall Street’s View

According to TipRanks, the average rating on Eli Lilly is Strong Buy, with 17 Buy, two Hold, and one Sell ratings. Based on 20 Wall Street analysts offering 12-month price targets for Eli Lilly, the average target is $1,247.71, implying about 34.59% upside from the last price of $927.03.

Conclusion

I am bullish on Eli Lilly because I think the market is still underestimating the full size and duration of its obesity opportunity. 

Yes, the stock is large. Yes, expectations are elevated. Yet Lilly continues to show strong GLP-1 demand, and the next phase of the story — orforglipron, Medicare expansion, international growth, and pipeline follow-ons like retatrutide — still looks underappreciated to me.

After a 16% year-to-date pullback, the setup looks more attractive than it did a few months ago. For long-term investors, I think Lilly still offers one of the best combinations of growth, visibility, and strategic positioning in large-cap healthcare.