Eli Lilly vs. Viking Therapeutics Stock: Which Is the Best Growth Opportunity, According to Wall Street?

Eli Lilly (NYSE: LLY) and Viking Therapeutics (NASDAQ: VKTX) offer investors the chance to invest in one of today's highest-potential industries: weight loss drugs. The market for these products, worth about $28 billion right now, is forecast to grow to $95 billion by 2030, according to Goldman Sachs Research. And already, weight loss drugs have been supercharging the revenue of market leaders Lilly and Novo Nordisk.

Viking hasn't yet launched a weight loss drug, but it has candidates in phase 2 and phase 3 trials, and has reported great results so far. For investors, Lilly and Viking have brought in triple-digit gains over the past three years, though both stocks have stumbled in more recent times. Now, moving forward, which is the best growth opportunity according to Wall Street? Let's find out.

Image source: Getty Images.

The Eli Lilly story

Eli Lilly has commercialized tirzepatide as a treatment for type 2 diabetes under the name Mounjaro and as a treatment for weight loss under the name Zepbound -- but doctors have prescribed either to patients aiming to shed pounds. These products each have delivered blockbuster revenue, and demand has been so high that they spent much of last year on the U.S. Food and Drug Administration's drug shortage list.

Since then, supply has returned thanks to Lilly's investments in manufacturing and a move to also offer Zepbound, previously only sold in injector pens, in single-dose vials -- these are easier and cheaper to produce than injector pens, helping Lilly bring more of this drug to market faster.

Though Lilly, as a big pharma company, sells a broad range of medicines, the weight loss portfolio is driving overall growth. In the most recent quarter, revenue climbed 38% to more than $15 billion, led by sales of these weight loss drugs. In fact, they made up more than half of Lilly's revenue in the period. Meanwhile, Lilly now is preparing to submit orforglipron, its oral candidate for obesity, for regulatory review worldwide this year.

So, it's very clear that these are key products for Lilly in the years to come -- and this is reinforced by the ongoing demand and the market forecast I mentioned above.

The Viking Therapeutics story

Viking Therapeutics is developing a drug in the same class as that of Lilly. These drugs are dual GIP/GLP-1 receptor agonists -- they act on hormonal pathways to regulate blood sugar levels and reduce appetite. And considering the demand out there for these drugs, Viking clearly could carve out a share of the market.

Where does the company stand right now? It's testing VK2735 in injectable form in a phase 3 trial and studying the candidate in pill form in a phase 2 trial. Results from each have been positive so far, positioning Viking to potentially compete with market leaders a few years from now.

Investors like Viking for its weight loss portfolio -- and Viking could shepherd candidates from here to the finish line on its own and succeed. But some investors also have piled into the Viking story with the idea that the company might receive a takeover offer or key partnership. Many others in the pharma and biotech space are interested in getting in on the weight loss industry -- and for those that have the cash, the easiest route is buying a company that's close to the finish line.

All of this makes Viking a company that offers significant growth potential.

What does Wall Street say?

Now, let's consider Wall Street's price forecasts for each of these possible winners. Over the coming 12 months, the average forecast for Eli Lilly is $891, implying a 10% increase from today's price. Meanwhile, the average forecast for Viking is more than $92, and that equals a 179% gain from the current level. In both cases, buy recommendations far outweigh recommendations to sell.

So, Wall Street likes both of these companies -- but forecasts the most growth from Viking. Does that mean every investor should pile into Viking? Not necessarily. It's important to consider your investment style. Viking, without products on the market so far, carries some risk, so cautious investors may be better off buying Lilly shares. But, if you have more of an aggressive investment style, now is a great time to jump into the Viking story and buy the stock on the dip.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.