Key Points
Lilly became the first pharmaceutical company with a market cap of $1 trillion.
The company's earnings grew by triple digits in the first quarter.
It's forecasting double-digit revenue and earnings growth this year.
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Eli Lilly (NYSE: LLY) became the first $1 trillion pharmaceutical company late last year, built on the strength of its GLP-1 empire used for diabetes and weight loss. Pharmaceutical stocks have struggled in 2026, but Eli Lilly's shares are up more than 45% over the past year. And over the past three months, its pedestrian 2% rise has outpaced its competitors.
The Indianapolis-based healthcare company has several catalysts that should continue to drive its share growth, led by its expanded GLP-1 earnings, its willingness to invest its cash to improve its pipeline through acquisitions, and the continued rise of its high-margin specialty drugs. Here's more on all three.
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1. Its GLP-1 franchise is expanding rapidly
The primary engine behind the huge revenue expansion is its Mounjaro, powered by the active ingredient tirzepatide. The drug, sold as Mounjaro for type 2 diabetes and Zepbound for obesity, helped grow revenue by more than 56% year over year to $19.8 billion in the first quarter, and improved earnings per share (EPS) to $8.55, up 156% over the same quarter a year ago.
Those numbers don't reflect the impact that Foundayo, a daily GLP-1 pill, will have. The Food and Drug Administration (FDA) approved Foundayo on April 1 to treat adults with weight-related medical problems. The therapy will attract users who dislike needles and will likely be cheaper to manufacture than injectables.
The company is also seeing more pharmacy benefit managers reinstate Zepbound as a preferred drug, opening it up to more users.
2. Lilly is using its profits to broaden its portfolio
On May 26, Lilly announced it was spending $3.83 billion to buy three biotech companies, gaining promising pipeline candidates from all three. It spent $1.5 billion to buy Curevo, gaining amezosvatein, a vaccine candidate for the prevention of shingles in adults.
It paid $780 million for LimmaTech Biologics, known for its pipeline of vaccines to treat biological pathogens, most notably LTB-SA7, a vaccine against the leading cause of surgical-site infection.
And for $1.55 billion, it acquired the Vaccine Company, known for its vaccines to treat various viral pathogens, most notably an unnamed drug for the Epstein-Barr virus.
In April, the company spent $2.3 billion on Ajax Therapeutics, known for promising therapies to treat rare chronic blood cancers.
3. Lilly keeps adding indications
While its GLP-1 drugs are understandably getting a lot of attention, Lilly's immunology, oncology, and neuroscience therapies grew revenue by 160% year over year in the first quarter.
There's more on the way. The company has 42 phase 3 trials and 32 phase 2 trials, even before its most recent acquisitions. Over the next few years, management anticipates approval for several oncology treatments, including breast cancer drug imlunestrant as a combination therapy with other targeted agents; and Alzheimer's therapy donanemab, which, while approved by the FDA in the U.S., is seeking worldwide approvals.
Expensive, maybe, but worth it
Lilly shares trade at one of the highest valuations among major pharmaceutical companies: around 29 times its projected earnings for the next 12 months. That premium reflects expectations that demand for its GLP-1 drugs will remain exceptionally strong. The company forecasts 2026 revenue between $82 million to $85 million, up 28% at the midpoint, and EPS from $35.50 to $37, an increase of 49.7% at the midpoint.
The stock has considerable momentum, and its ability to make its GLP-1 drugs more available provides the revenue it needs to develop the rest of its growing portfolio.
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James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool has a disclosure policy.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
