Is It Too Late to Buy Eli Lilly Stock? Here's What $1,000 Invested Today Could Be Worth in 10 Years.
Key Points
The obesity drug industry is likely a decade-long tailwind for Eli Lilly's business.
Foundayo and Retatrutide could cement a decade of growth.
The numbers show that Eli Lilly can still make investors good money over the next decade.
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Obesity drugs might be the hottest growth story in healthcare right now. GLP-1 agonists and similar drugs encourage weight loss for managing obesity and treating type 2 diabetes. The viral success of Mounjaro and Zepbound has made Eli Lilly (NYSE: LLY) a home run winner. The stock's 160% run over the past three years has been a windfall for investors.
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But this story isn't over. Research from Morgan Stanley estimates that the obesity drug market will continue to surge, from approximately $15 billion in 2024 to as much as $150 billion by 2035. Here's how Eli Lilly can continue to lead over the next decade, and how that could impact the stock.
Obesity drug momentum should continue
Believe it or not, obesity drugs are just starting to hit their stride. Up until a few months ago, all the leading drugs were subcutaneous, meaning patients had to inject them. Eli Lilly just recently launched Foundayo in the United States in April. It's the company's first pill-form obesity drug, and the second to market behind arch-rival Novo Nordisk's Wegovy pill. Many patients prefer pills to needles, so look for oral treatments to push the obesity drug market to new heights.
Image source: Getty Images.
That said, subcutaneous drugs will remain popular due to their bioavailability and efficacy. Eli Lilly's Retatrutide is a next-generation subcutaneous triple-receptor agonist currently in late-stage clinical testing. It could have massive commercial potential due to the strong weight-loss results it has achieved in its clinical trials. Assuming it reaches the market, it and Foundayo represent new patent-protected catalysts that could drive sales growth for years to come.
Where the stock may go from here
Understandably, Wall Street expects big things from Eli Lilly in the future. Analysts estimate the company will grow earnings by an average of 22% annually over the next three to five years. To build some conservatism into the math here, I'll assume that Eli Lilly grows earnings at an annualized rate of 15% over the next decade. That seems ambitious but realistic, given the sales potential of Foundayo and Retatrutide in a soaring obesity drug market.
Applying that using the current consensus 2026 earnings estimates of $35.60 per share as year 1, it would look like this:
| Year | Calculated Earnings per Share |
|---|---|
| 1 | $35.60 |
| 2 | $40.94 |
| 3 | $47.08 |
| 4 | $54.14 |
| 5 | $62.26 |
| 6 | $71.60 |
| 7 | $82.34 |
| 8 | $94.69 |
| 9 | $108.90 |
| 10 | $125.23 |
Data source: Author's calculations.
The stock trades at 34 times its 2026 earnings estimate today. Even if that valuation drops to 25 times by year 10, the resulting share price of $3,130.75 means that investors buying today would see their investment grow by roughly 158% -- not including any dividends paid along the way.
It would also mean that the stock didn't quite sustain its returns from the past few years. But it's certainly not too late to buy Eli Lilly stock and still expect to make good money over the long term.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool has a disclosure policy.
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