2 Reasons I'm Keeping My Eye on Eli Lilly Stock Right Now

Eli Lilly (NYSE: LLY) has reported an impressive performance for the third quarter, with both revenues and earnings handily beating analysts' consensus estimates. Revenues rose 54% year over year to $17.6 billion, while adjusted earnings per share (EPS) soared by 495% to nearly $7.02. Management is now guiding for revenues of $63 billion to $65 billion in 2025, up from its prior estimated range of $60 billion to $62 billion. The company also expects 2025's adjusted EPS to be in the range of $23 to $23.70, a significant improvement from the previous projection of $21.70 to $23.

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Eli Lilly's shares are up 17.5% so far in 2025, modestly outpacing the S&P 500, but the growth story is far from over. Here are two potent reasons why there's still meaningful upside potential for this stock in 2026.

The GLP-1 portfolio

Although Eli Lilly has a well-diversified portfolio with drugs targeting indications across oncology, neuroscience, and immunology, its diabetes and weight loss treatments have been its key growth catalyst for the past few quarters.

In the rapidly growing U.S. incretin analog market, Eli Lilly's drugs accounted for a 57.9% share of total prescriptions in Q3, up 1 percentage point from the previous quarter. Eli Lilly's GLP-1 drug, tirzepatide, is marketed as Zepbound for weight management and as Mounjaro for type 2 diabetes. Zepbound prescriptions in the U.S. tripled year over year in the third quarter, and the drug accounted for a 63% share of the branded weight loss drug prescriptions in the U.S.

Meanwhile, Mounjaro's total U.S. prescriptions rose by over 60%. The drug is the most widely prescribed type 2 diabetes incretin analog drug in the U.S., with a 45% market share. Mounjaro is also available in 55 other countries, and its international sales soared by 56% in the quarter. There's limited insurance coverage for weight loss indications in global markets, so around 75% of Mounjaro's revenues in non-U.S. markets come from individuals paying out of pocket. This underscores the high clinical need for the drug.

Upcoming catalysts

Eli Lilly is also focused on further expanding its GLP-1 drug portfolio. The company has completed its phase 3 trials for its oral GLP-1 candidate, orforglipron. In one of those phase 3 trials, orforglipron demonstrated superiority compared to the highest available dose of oral semaglutide (which is FDA-approved and widely used for type 2 diabetes) in blood sugar control and in weight loss. The company is now preparing to file an application securing regulatory approval from the Food and Drug Administration (FDA), and plans to launch it in the U.S. in 2026. If approved, an oral drug will make treatment more convenient for patients compared to injectables.

The company will also soon have results from its ATTAIN-MAINTAIN phase 3 study, which is evaluating whether patients who lost weight on injectable GLP-1 drugs can maintain their lower weights by taking the oral therapy. If the results are favorable, the company could also position orforglipron as a maintenance therapy for weight loss.

Additionally, Eli Lilly expects that another GLP-1 candidate, retatrutide, will produce more rapid weight loss results than currently approved drugs. The company is awaiting results from six phase 3 trials, and should have them by the end of 2026.

Recently, Eli Lilly secured FDA approval for Inluriyo to be used to treat patients with advanced or metastatic breast cancer who have certain mutations (ER+, HER2-, ESR1). The company has also secured approval from the European Union's regulator for Kisunla to be prescribed in early symptomatic Alzheimer's disease. All of those points suggest that the company will have multiple growth engines to drive its sales over the next few years.

Valuation

Eli Lilly is currently trading at about 29 times forward earnings. However, considering the many catalysts its business has, the stock appears to be an impressive pick even at that elevated valuation level.

Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.