Lilly Up Around 7% in a Week: Should You Buy, Sell or Hold the Stock?

Eli Lilly and Company’s LLY stock has risen around 6.7% in a week, backed by strong company-specific news and the overall recent rally in the U.S. drug and biotech sector. Eli Lilly stock hit a new 52-week high on June 26. Last week, the European Medicines Agency's Committee for Medicinal Products…

Eli Lilly and Company’s LLY stock has risen around 6.7% in a week, backed by strong company-specific news and the overall recent rally in the U.S. drug and biotech sector. Eli Lilly stock hit a new 52-week high on June 26. Last week, the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) recommended approval of Lilly’s drug, Jaypirca, for the treatment of adults with chronic lymphocytic leukemia (CLL) across all lines of therapy, regardless of prior BTK inhibitor treatment. If approved by the European Commission, the recommendation would expand Jaypirca's indication in the European Union beyond its current use, with a final decision expected within one to two months.

Lilly also announced additional details of its Medicare GLP-1 Bridge program, which will allow eligible Medicare Part D beneficiaries to access its newly launched once-daily oral GLP-1 pill, Foundayo (orforglipron) and blockbuster GLP-1 injection, Zepbound (tirzepatide) for obesity beginning July 1, 2026, for $50 per month with prior authorization. The program, which runs through Dec. 31, 2027, marks the first broad Medicare Part D coverage pathway for GLP-1 obesity medicines for eligible patients meeting CMS clinical criteria.

Lilly’s bullish run does not seem to stop as its stock has risen 53.7% in the past year. It is the largest drugmaker, valued at more than $1 trillion and the only one with stock trading above $1,000 per share.

However, though the stock’s bull run will impress investors, those with a long-term investment horizon should make a decision based on the company’s fundamentals after carefully analyzing its strengths and weaknesses.

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. 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 account for more than 60% of the company’s total revenues, with sales expected to continue to remain strong throughout 2026.

Mounjaro is the market leader in new prescriptions within type II diabetes incretin analogs in both the United States and ex-U.S. markets. Zepbound also holds a leading market share in the branded obesity market with nearly 70% share of new prescriptions.

Lilly’s Broad Obesity Pipeline

The obesity market is still in the early stages of expansion, with millions of eligible patients yet to begin treatment. As manufacturing capacity improves and global reimbursement gradually expands, Lilly has significant room to grow sales over the next several years. 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.

Foundayo, approved in April in the United States, offers the benefits of GLP-1 therapy in a pill form. Early launch data for Foundayo has been encouraging, and insurance coverage for the pill is expanding rapidly through major PBMs. It can prove to be a commercial game-changer for Lilly. Lilly expects to launch Foundayo in most international markets during 2027.

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 Wegovy. Oral pills may significantly lower the 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 sales. In addition to obesity and diabetes, Lilly is evaluating Foundayo in six phase III studies for other diabetes and obesity-related diseases.

For the type II diabetes indication, Lilly has filed regulatory applications in several countries, while it expects to file the same in the United States in late second-quarter 2026.

In its GLP pipeline, retatrutide is one of Lilly’s most important late-stage candidates, as it targets three biological pathways — GLP-1, GIP and glucagon — potentially offering greater weight-loss and metabolic benefits than existing medicines, which mostly act on one or two biological pathways. The candidate has demonstrated approximately 28% weight loss in late-stage studies. Lilly plans to seek approval for retatrutide for obesity and knee osteoarthritis pain in 2026. If approved, retatrutide could become another multibillion-dollar product.

LLY Successfully Diversifies Beyond GLP-1

Lilly's investment case is no longer dependent solely on its GLP-1 franchise. Lilly has secured approvals for several non-GLP1 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, Kisunla (donanemab) for early symptomatic Alzheimer’s disease and Inluriyo (imlunestrant) for metastatic breast cancer. These drugs are also contributing to Lilly’s revenue growth, with the positive trend expected to continue.

Lilly has also embarked on an aggressive M&A spree in 2026, acquiring and partnering with biotech companies across oncology, neuroscience, cardiovascular disease, gene editing and vaccines to diversify its long-term growth drivers beyond GLP-1 therapies. The company has announced more than $20 billion in biotech deals this year.

Race to Make Oral Obesity Pill Intensifies

The global obesity market is one of the largest and fastest-growing opportunities in healthcare today. The market is projected to grow dramatically, reaching nearly $120 billion by 2035, according to Goldman Sachs estimates.

Nordisk had gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026, which gave it a first-mover advantage over Foundayo. However, Lilly may be able to close the gap quickly now that it has launched Foundayo.

While Lilly and Novo Nordisk currently dominate this space, smaller biotechs like Structure Therapeutics GPCR and Viking Therapeutics VKTX 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. Viking plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026.

Structure Therapeutics’ phase II ACCESS study on its orally administered GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.

LLY’s Stock Price, Valuation and Estimates

Lilly’s stock has risen 11.2% so far this year compared with the industry’s increase of 12.6% over the same timeframe.

LLY Stock Outperforms Industry

From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 29.63 forward earnings, higher than 18.70 for the industry. However, the stock is trading below its 5-year mean of 34.57.

LLY Stock Valuation

The Zacks Consensus Estimate for 2026 earnings has risen from $35.03 to $35.60 per share over the past 60 days, while that for 2027 has risen from $44.07 to $44.58 per share over the same timeframe.

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. 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.

Nonetheless, Lilly remains one of the most compelling growth stories in the pharmaceutical industry, supported by its significant price appreciation, dominant position in the rapidly expanding obesity and diabetes markets, a diversified late-stage pipeline and strong financial performance. While the stock trades at a premium valuation after a remarkable multi-year rally, the company's long-term growth prospects remain among the strongest in the healthcare sector.

One should stay invested in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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