Eli Lilly is a buy; the stock is undervalued and expected to rise by about 30% in the next 12-18 months.

Although Eli Lilly was the second company to introduce oral pills for weight loss treatments, it had already begun to acquire a significant market share. The company boasted a market share exceeding 30% in new initiations within the oral GLP-1 drug sector , identifying more than 36,000 people.

In addition, in other good news, Eli Lilly announced a recent study indicating that the drug Zybound leads to direct savings in medical costs within 6 months, reaching up to $600 per month per person by the twelfth month .

In other words, using and paying for Z-bound, even if it's out of your own pocket, will yield greater savings in the long run because you will experience fewer health problems , reducing your need for medical treatment.

So, does all this make Eli Lilly stock a good investment opportunity to buy? You can see this increase here in Eli Lilly's revenues over the past twelve months , which jumped to $80 billion.

This figure represents an increase from approximately $30 billion in 2022 and about $8 billion in 2020. This means a nearly 10- fold increase in revenue in less than 10 years for Eli Lilly.

This is rare in the pharmaceutical industry, and this growth rate certainly exceeds industry growth rates . So, Eli Lilly is gaining an increasing market share . In order to maintain these gains, Eli Lilly is making further improvements.

They focus more on treatments tailored to individual patients rather than a one-size- fits-all weight loss treatment. Currently, they have one injectable form and one oral pill , and they are working to expand this portfolio to include different treatments that suit patients’ needs based on what they are primarily looking for .

Some patients may seek the best tolerability, that is, the treatment that causes the least amount of disturbance and discomfort when taken. Other patients may be seeking maximum weight loss, and to achieve this, they are willing to endure more discomfort, nausea, and other stomach pains as a result of taking these treatments.

Based on individual needs, Eli Lilly strives to provide more options available.

It's not just about increasing sales, but it also comes with very profitable profit margins. Eli Lilly's operating margins have risen to record highs over the past twelve months by 49.7%.

This represents an increase of more than 3 times compared to 15% in 2017. So, in this period, Eli Lilly's revenues have increased more than 10 times. Its operating profit margins have more than tripled, a clear indication of a thriving, fully operational business .

But what you get with Eli Lilly, what you buy today, is not just a company that sells weight loss treatments. You are getting a company with decades of experience in spending money on research and development of treatments that consumers pay billions of dollars to buy.

This is what you are actually buying. That is the skill you gain because, hopefully, in this channel, we are looking at long-term investment. We are not looking to invest for the next few days or weeks.

We are looking ahead to the next few years and perhaps even the next few decades. And weight loss treatments, their sales may continue for a few more years, perhaps. But you need new treatments to follow that to achieve long-term growth for the company.

Given that this company has proven its prowess in this area, it is reasonable to assume that it will be able to research and develop new treatments that will generate sales and growth in the years following weight loss treatments .

To be more precise, the company reported a return on invested capital of 37% over the past twelve months, up from about 10% in 2017.

Now, with pharmaceutical companies, you will face big booms and quiet growth periods because some treatments may be huge successes while others may be complete failures. But, on average, you will get strong results.

It is not surprising that Eli Lilly outperforms some of its pharmaceutical peers, including Novo Nordisk and Pfizer, because if you look at the previous decade, you will find that Eli Lilly spent the largest percentage of its revenue on research and development.

Therefore, they work harder and spend more on research and development compared to their counterparts. Therefore , it is understandable that they will achieve better results, and better end results, because they spend more.

They are also more efficient. They do not waste resources. Over the past decade, they have significantly outperformed the average compared to Novo and Pfizer in this regard.

The valuation of Eli Lilly is not exaggerated. In fact, I feel the stock is undervalued at a forward price-to-earnings ratio of 24. It is still near the lower end of what the stock has traded at according to this metric going back 3 years.

Similarly, today I reviewed my free cash flow model for Eli Lilly, and my estimates came in upward because the company is gaining a larger market share in the oral pill version than I had previously estimated.

Thus, I revised my free cash flow estimates upwards. I now value this company at $1,494 per share, compared to the current market price of $1,151. This means I have calculated an increase of approximately 30% in Eli Lilly's stock over the next twelve to eighteen months.

It is no wonder, then, that I am so bullish on Eli Lilly stock that I bought it for my portfolio earlier this year and I am interested in adding more. I believe that Eli Lilly stock represents a buying opportunity at the moment.

Absolutely, and I have high confidence or conviction in this rating, which I will update today, September 23, 2026.