Eli Lilly (LLY) Bulls Prepare for Multiyear Upside
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One advantage of investing in LLY now is that, if the macroeconomy experiences a mild downturn in the second half of 2025, the stock is likely to hold up better than tech names, offering some protection against volatility until the next bull market takes off in 2026. Several factors are aligning for LLY stock, which puts me firmly in the Bullish camp.
Key Near-Term Catalysts to Watch
Eli Lilly is set to report earnings on August 7, 2025, with EPS expectations of $5.57—representing 43% year-over-year growth—and revenue forecast to rise 30% to almost $15 billion. Given the stock's premium valuation (with a P/E of 55 and P/S of 14), any earnings miss could pressure the stock further during its ongoing consolidation phase. That said, sentiment appears resilient, with shares trading sideways since November 2024—suggesting that even results in line with expectations may be enough to maintain stability until more impactful catalysts emerge.
Looking ahead, late 2025 brings a major milestone: Eli Lilly plans to submit orforglipron for FDA approval. This oral GLP-1 weight loss drug has the potential to reshape the obesity treatment market and significantly lift investor sentiment once approved and commercially launched in 2026. Around the same time, or possibly early 2026, the company is also expected to release Phase 3 trial results for retatrutide—a promising 'triple-G' agonist that targets GLP-1, GIP, and glucagon receptors for potentially enhanced effectiveness.
In 2026, the market launch of orforglipron will be the key event to watch, but Lilly is also positioning itself for long-term growth through a major manufacturing expansion in Indiana. This added capacity is expected to ease supply constraints and support strong, sustained revenue growth as demand accelerates.
Eli Lilly's 14-week Relative Strength Index (RSI) currently sits at 47, suggesting the stock is trading at a relatively fair value. Shares have moved sideways for more than six months, staying below the 50-week moving average—a sign that the market sees further downside as unlikely for a company with such strong growth prospects. With capital flowing into tech and persistent macroeconomic concerns around interest rates and geopolitics, it's not surprising that investors are hesitant to make a decisive move on LLY for now.
Still, the fundamentals remain strong. Consensus estimates project 35% normalized EPS growth in fiscal 2026, followed by a solid 25% in fiscal 2027. While that represents a moderation from the 70% EPS growth expected in fiscal 2025, it's still impressive—and a slowdown in growth doesn't imply a falling stock price. Rather, it typically leads to some compression in valuation multiples.
Currently, Eli Lilly's forward P/E ratio stands at 35. If that multiple compresses to 30 over the next 18 months, and fiscal 2027 EPS comes in at $38.50 as projected, the stock would trade around $1,150 by December 2026. With shares currently at $775, that implies roughly 50% upside in this bull-case scenario—or about a 30% return over the next 12 months.
Negative Revisions and FDA Delays Could Spark Trouble
Novo Nordisk (NVO), Eli Lilly's biggest rival in the weight-loss drug space, recently lowered its guidance following the unexpected departure of its CEO. As a result, the broader obesity-treatment sector is facing short-term headwinds, with investors reassessing the long-term thesis. Despite this, demand for obesity-related treatments remains strong over the long run—and this moment of uncertainty could offer Eli Lilly a chance to strengthen its market position. I remain bullish and am looking past the near-term volatility in the stock.
The most significant risk to Eli Lilly's stock going forward is delays in FDA approval for orforglipron and retatrutide. Such setbacks could prompt downward revisions to growth forecasts. However, I view this risk as relatively low.
Eli Lilly has a strong track record of delivering under pressure and securing key regulatory approvals, including several in recent years. That said, orforglipron—a first-of-its-kind oral GLP-1—carries some added risk due to its novel delivery method. The same applies to retatrutide, a completely new 'triple-G' agonist targeting GLP-1, GIP, and glucagon receptors, which may attract greater FDA scrutiny and introduce potential approval delays.
Is Eli Lilly a Good Stock to Buy?
On Wall Street, Eli Lilly commands a consensus Strong Buy rating based on 17 Buys, two Holds, and zero Sells over the past three months. LLY's average stock price target is $1,028.80, indicating a ~35% upside potential over the next 12 months.
Even the low estimate of $883 reveals a substantial 14% return from the present price of $775. Eli Lilly is unequivocally a Buy in my book, with a favorable valuation and very strong growth prospects.
Picking the Right Time to Strike on Eli Lilly
Eli Lilly is currently my largest portfolio holding, making up over 15% of my allocation. Like AI stocks, it offers exceptional growth potential—but with a far more attractive valuation at this stage. I remain bullish on Eli Lilly for at least the next 18 months and am eyeing a potential 50% gain by December 2026. With major catalysts like orforglipron, retatrutide, and anticipated interest rate cuts on the horizon, LLY is well-positioned for a strong rally in 2026.
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