Where Will Eli Lilly Stock Be in 5 Years? Follow the Pipeline Beyond Zepbound

Eli Lilly (NYSE: LLY) became the first trillion-dollar healthcare stock in 2025, after several years of market-beating returns. The company owes that in part to its weight loss medicine, Zepbound, which is currently one of the best-selling drugs in this area. However, the company will likely face significantly more competition over the next five years. Will Eli Lilly continue producing solid returns, or will it destroy shareholders' wealth? The answer partly depends on Eli Lilly's pipeline progress.

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The next generation of weight loss medicines

Eli Lilly's Zepbound is currently the leading medicine in the anti-obesity market largely because it is more effective than its main competitor, Novo Nordisk's (NYSE: NVO) Wegovy. In a head-to-head clinical trial, Zepbound led to a mean weight loss of 20.2% over 72 weeks, versus Wegovy's 13.7%. Zepbound also beat Novo Nordisk's next-gen medicine, CagriSema, in a head-to-head clinical trial run by the Denmark-based pharmaceutical leader in patients who were overweight or obese. There are several interesting Phase 3 assets across the industry. Novo Nordisk is itself testing zenagamtide.

Amgen (NASDAQ: AMGN) is developing MariTide, a potential long-acting option, and there are at least several more in development. But Eli Lilly's pipeline still looks highly competitive. Consider the company's retatrutide. This therapy posted a mean weight loss of 28.3% in one 80-week Phase 3 study. As some have pointed out, this magnitude of weight loss rivals what we typically see in bariatric surgeries. Retatrutide has also proved highly effective at helping patients who are diabetic and overweight or obese lose weight. That's significant since this is a population where weight loss doesn't come easy.

Eli Lilly has another promising medicine it is working on: eloralintide. It has performed well as a monotherapy in Phase 2 clinical trials, demonstrating encouraging tolerability compared with the company's other products. Eloralintide still has to complete Phase 3 studies, but so far, it looks highly encouraging. There are at least two other strategies Eli Lilly is pursuing that could prove highly lucrative down the road. First, the company is exploring combination therapies.

In recent weeks, it has posted results from clinical trials for such treatments. For instance, in one study, the company administered Zepbound alongside Taltz (an approved immunology medicine) to patients with obesity and either psoriasis or psoriatic arthritis. The company noted that the combo led to greater improvements in disease activity and metabolic outcomes than administering Taltz alone. In another recent Phase 2 study, Eli Lilly combined Zepbound with eloralintide, which led to significant weight loss in patients with obesity or overweight and type 2 diabetes. Second, Eli Lilly has explored various maintenance dosing regimens.

That's important because many patients who lose weight thanks to anti-obesity medicines end up regaining it. In one study, it gave such patients Foundayo, its oral weight loss drug, after an induction phase during which they lost weight on Zepbound or Wegovy. Foundayo helped patients keep most of the weight off. Both of these strategies could help Eli Lilly attract far more patients, and the company is also testing some of its candidates, including retatrutide, across other indications such as obstructive sleep apnea, back pain, and metabolic dysfunction-associated steatotic liver disease.

Beyond Lilly's core markets

Eli Lilly's pipeline suggests the company could remain a leader in the weight-loss market and in diabetes, another area driving significant growth for the pharmaceutical giant. But beyond its core therapeutic areas, Eli Lilly's pipeline features many attractive products, several of which it added to its portfolio through acquisitions in recent years. Eli Lilly has beefed up its pipeline in oncology, immunology, neuroscience, pain treatment, and more. And over the next few years, we could see the company make progress across these fields as well.

So, Eli Lilly isn't just a weight-loss stock, and even as competition heats up in its core area, the company's diversification efforts should pay off, allowing it to launch blockbuster products elsewhere. That's another reason the stock looks attractive, but is it too expensive right now? Eli Lilly is trading at 24.4x forward earnings, versus an average of 18.3x for healthcare stocks. But considering how fast the company's earnings have been growing -- and the significant opportunities ahead -- that valuation seems fair. So, where will the stock be in five years?

In my view, it will likely still be the leader in diabetes and weight loss and will also launch important products elsewhere. Its financial results could remain solid, and the stock could deliver strong returns through 2031.

Prosper Junior Bakiny has positions in Eli Lilly and Novo Nordisk. The Motley Fool has positions in and recommends Amgen, Eli Lilly, and Novo Nordisk. The Motley Fool has a disclosure policy.