Eli Lilly Just Raised Its 2026 Revenue Forecast by $5.5 Billion. Is the Stock Still a Buy?

Eli Lilly (LLY) has increased its revenue forecast for 2026 by $5.5 billion. However, the stock is currently trading at 47 times trailing earnings, which is nearly double the industry average. Despite this, the report suggests that the stock may still be a worthwhile investment.

The company's sales have been growing rapidly, with a 39% increase in revenue to $24.4 billion in the third quarter, compared to the same period last year. Profits have also soared, with earnings per share rising 16% to $7.22. Management has raised its guidance for revenue, projecting it to reach between $87 billion and $92 billion for the year.

Lilly's GLP-1 drugs, Mounjaro and Zepbound, have been particularly successful. Zepbound sales rose 49% in the third quarter to about $5.4 billion, while Mounjaro sales increased 65% to over $10.7 billion. Foundayo, an oral weight-loss drug, contributed $184 million in sales.

The report highlights several reasons why the market for GLP-1 drugs could grow significantly. There are untapped international markets, particularly outside of Europe, with over a billion people living with obesity. Additionally, there are new use cases for GLP-1 drugs, such as treating cardiovascular, kidney, liver, arthritis, and sleep apnea disorders. The drugs have also shown promise in treating substance use disorders, reducing the risk of addiction and overdose.

Furthermore, studies suggest that GLP-1 drugs may have anti-aging effects, potentially extending lifespan in older mice. If these findings hold true for humans, Lilly's tirzepatide could be a game-changer in the anti-aging market.

Given these factors, the report concludes that Lilly is currently the leader in the GLP-1 drug market and remains a buy, despite the high stock price. The potential for further growth and innovation in this field makes Lilly an attractive investment opportunity.