Analysis of Risks and Opportunities in Healthcare Stock Investment
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9h ago
0mins
Should l Buy LLY?
Source: NASDAQ.COM
- Valuation Insights: While the healthcare sector's forward P/E ratio stands at 18.7, lower than the S&P 500's 22.2, Eli Lilly's high P/E of 30.6 indicates market over-optimism about its growth, significantly increasing investment risk.
- Market Dynamics: Viking Therapeutics' stock fell by 8.6% following disappointing clinical trial results in late 2025, serving as a cautionary tale for investors considering buying at the peak popularity of stocks in the healthcare sector.
- Policy Impact Assessment: The implementation of drug price negotiations mandated by the Inflation Reduction Act in 2026 could pressure drugmakers' margins, making it essential for investors to monitor how such policy changes might affect healthcare revenues.
- Funding Flow Mechanism: In the U.S., healthcare funding comes from a mix of private insurance, public payers, and out-of-pocket spending, and understanding these funding flows and their potential shifts is crucial for investment decisions, especially in a changing policy landscape.
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Analyst Views on LLY
Wall Street analysts forecast LLY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LLY is 1192 USD with a low forecast of 950.00 USD and a high forecast of 1500 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 1020.840
Low
950.00
Averages
1192
High
1500
Current: 1020.840
Low
950.00
Averages
1192
High
1500
About LLY
Eli Lilly and Company is a medicine company, which discovers, develops, manufactures, markets, and sells pharmaceutical products worldwide. Its cardiometabolic health products include Basaglar; Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, and others; Humulin, Humulin 70/30, and others; Jardiance; Mounjaro; Trulicity; Zepbound; VERVE-102; VERVE-201, and VERVE-301. Its oncology products include Cyramza, Erbitux, Tyvyt, and Verzenio. Its immunology products include Ebglyss, Olumiant, Omvoh, and Taltz. Its neuroscience products include Emgality and Kisunla. The Company is also engaged in radiopharmaceutical discovery, development, and manufacturing efforts, and clinical and pre-clinical radioligand therapies in development for the treatment of cancer. It is also developing an oral small molecule inhibitor of a4b7 integrin for inflammatory bowel disease (IBD). It is evaluating its novel gene therapy candidate, ixoberogene soroparvovec.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Eli Lilly Analyst Raises Price Target to $1,300
- Strong Earnings Beat: Eli Lilly reported sales of $19.292 billion and earnings of $7.54 per share, exceeding consensus estimates of $17.944 billion and $6.91 per share, indicating robust market performance and profitability.
- Sales Growth Highlights: Zepbound sales reached $4.261 billion, surpassing Street expectations of $3.880 billion, while Mounjaro sales stood at $7.409 billion, also beating the consensus of $6.820 billion, reflecting strong product demand.
- Optimistic Future Outlook: Management guided for 2026 sales of $80-$83 billion and earnings per share of $33.50-$35.00, higher than consensus estimates of $77.64 billion and $33.04, showcasing the company's growth potential.
- Prominent Growth Profile: The analyst noted that Eli Lilly has the best growth profile in their coverage universe, with projected top-line growth of approximately 20% and bottom-line growth of around 40% by 2026, establishing a clear runway for sustained growth into the next decade.
See More
Overview of Medicare Changes for Retirees in 2026
- Drug Cost Reduction: Thanks to the Inflation Reduction Act, retirees will see significant reductions in prescription drug costs starting in 2026, with price negotiations for the first ten drugs taking effect on January 1, 2026, alleviating financial burdens and improving overall financial health for retirees.
- Rising Medicare Costs: The standard Medicare Part B premium will increase from $185 to $202.90 in 2026, while the annual deductible will rise by $26 to $283, negatively impacting retirees' disposable income, especially as Social Security cost-of-living adjustments may not keep pace with these increases.
- Impact on High-Income Retirees: High-income retirees will face a 9% increase in the income-related monthly adjustment amount (IRMAA) in 2026, with income thresholds rising by about 3%, meaning more retirees will encounter higher healthcare costs, further straining their financial resources.
- Medicare Advantage Market Turmoil: Major insurers like Humana and UnitedHealth have withdrawn Medicare Advantage offerings in hundreds of counties, leading to reduced services and limited networks, with CEOs warning that future payment increases may have a “profoundly negative impact” on seniors' benefits and access to care.
See More
Overview of Medicare Changes for Retirees in 2026
- Lower Drug Costs: Starting in 2026, the CMS can negotiate prices for the first time under the Inflation Reduction Act, potentially lowering costs for retirees on 10 key prescription drugs, particularly those for diabetes and heart conditions, thereby alleviating some financial burdens on retirees.
- Rising Premiums and Deductibles: The standard Medicare Part B premium has increased from $185 to $202.90 in 2026, with the annual deductible rising by $26 to $283, leading 54% of Social Security recipients to feel that the 2.8% COLA is insufficient to offset these increases, which may heighten financial stress for retirees.
- Impact on High-Income Retirees: High-income retirees will face a 9% increase in the income-related monthly adjustment amount (IRMAA) in 2026, with income thresholds rising by about 3%, further straining their healthcare budgets and reducing disposable income.
- Medicare Advantage Chaos: Major insurers like Humana and UnitedHealth have withdrawn Medicare Advantage offerings in hundreds of counties, reducing benefits for additional services; CEOs warn that the proposed 0.9% payment increase for 2027 could have a profoundly negative impact on seniors' benefits and access to care.
See More
Eli Lilly's Stock Rises Sharply Due to Increased Demand for GLP-1 Drugs
- Stock Performance: Eli Lilly's stock has surged 225% over the past three years, significantly outperforming the S&P 500's 66% gain, indicating strong performance in the GLP-1 drug market, although its high P/E ratio of 49 may deter some investors.
- Competitive Landscape: While Novo Nordisk ranks second in the GLP-1 drug market, its newly launched GLP-1 pill is seeing demand exceed expectations, potentially driving future growth, despite its stock being down 66% from 2024 highs.
- Medical Device Restructuring: Medtronic plans to spin off its diabetes business in 2026; although this division has been growing rapidly, its lower margins mean that the spinoff will enhance overall profitability and accelerate growth in its higher-margin sectors.
- Future Growth Potential: Despite Eli Lilly's strong performance in the GLP-1 market, Novo Nordisk's pill catalyst could help it regain momentum, while Medtronic's restructuring may unlock significant growth potential, making both companies worthy of investor attention.
See More
Analysis of Risks and Opportunities in Healthcare Stock Investment
- Valuation Insights: While the healthcare sector's forward P/E ratio stands at 18.7, lower than the S&P 500's 22.2, Eli Lilly's high P/E of 30.6 indicates market over-optimism about its growth, significantly increasing investment risk.
- Market Dynamics: Viking Therapeutics' stock fell by 8.6% following disappointing clinical trial results in late 2025, serving as a cautionary tale for investors considering buying at the peak popularity of stocks in the healthcare sector.
- Policy Impact Assessment: The implementation of drug price negotiations mandated by the Inflation Reduction Act in 2026 could pressure drugmakers' margins, making it essential for investors to monitor how such policy changes might affect healthcare revenues.
- Funding Flow Mechanism: In the U.S., healthcare funding comes from a mix of private insurance, public payers, and out-of-pocket spending, and understanding these funding flows and their potential shifts is crucial for investment decisions, especially in a changing policy landscape.
See More
Eli Lilly's Stock Soars 225%, Attracting Attention
- Eli Lilly's Strong Performance: Eli Lilly's stock has surged 225% over the past three years, significantly outperforming the S&P 500's 66% gain, indicating robust market performance and investor confidence.
- Novo Nordisk's Market Challenge: Although Novo Nordisk was first to market with a GLP-1 weight-loss drug, Eli Lilly's offerings have been better received, resulting in a 66% drop in Novo Nordisk's stock from its 2024 highs, highlighting competitive pressures.
- Medtronic's Business Restructuring: Medtronic plans to spin off its diabetes business in 2026; despite rapid growth in this division, its lower margins compared to other operations suggest that the spinoff will enhance overall profitability and growth potential.
- Future Growth Potential: Eli Lilly's past success does not guarantee future dominance, as Novo Nordisk's GLP-1 pill could revitalize its sales, while Medtronic's restructuring may unlock higher growth opportunities.
See More
Eli Lilly Analyst Raises Price Target to $1,300
- Strong Earnings Beat: Eli Lilly reported sales of $19.292 billion and earnings of $7.54 per share, exceeding consensus estimates of $17.944 billion and $6.91 per share, indicating robust market performance and profitability.
- Sales Growth Highlights: Zepbound sales reached $4.261 billion, surpassing Street expectations of $3.880 billion, while Mounjaro sales stood at $7.409 billion, also beating the consensus of $6.820 billion, reflecting strong product demand.
- Optimistic Future Outlook: Management guided for 2026 sales of $80-$83 billion and earnings per share of $33.50-$35.00, higher than consensus estimates of $77.64 billion and $33.04, showcasing the company's growth potential.
- Prominent Growth Profile: The analyst noted that Eli Lilly has the best growth profile in their coverage universe, with projected top-line growth of approximately 20% and bottom-line growth of around 40% by 2026, establishing a clear runway for sustained growth into the next decade.
See More
Overview of Medicare Changes for Retirees in 2026
- Drug Cost Reduction: Thanks to the Inflation Reduction Act, retirees will see significant reductions in prescription drug costs starting in 2026, with price negotiations for the first ten drugs taking effect on January 1, 2026, alleviating financial burdens and improving overall financial health for retirees.
- Rising Medicare Costs: The standard Medicare Part B premium will increase from $185 to $202.90 in 2026, while the annual deductible will rise by $26 to $283, negatively impacting retirees' disposable income, especially as Social Security cost-of-living adjustments may not keep pace with these increases.
- Impact on High-Income Retirees: High-income retirees will face a 9% increase in the income-related monthly adjustment amount (IRMAA) in 2026, with income thresholds rising by about 3%, meaning more retirees will encounter higher healthcare costs, further straining their financial resources.
- Medicare Advantage Market Turmoil: Major insurers like Humana and UnitedHealth have withdrawn Medicare Advantage offerings in hundreds of counties, leading to reduced services and limited networks, with CEOs warning that future payment increases may have a “profoundly negative impact” on seniors' benefits and access to care.
See More
Overview of Medicare Changes for Retirees in 2026
- Lower Drug Costs: Starting in 2026, the CMS can negotiate prices for the first time under the Inflation Reduction Act, potentially lowering costs for retirees on 10 key prescription drugs, particularly those for diabetes and heart conditions, thereby alleviating some financial burdens on retirees.
- Rising Premiums and Deductibles: The standard Medicare Part B premium has increased from $185 to $202.90 in 2026, with the annual deductible rising by $26 to $283, leading 54% of Social Security recipients to feel that the 2.8% COLA is insufficient to offset these increases, which may heighten financial stress for retirees.
- Impact on High-Income Retirees: High-income retirees will face a 9% increase in the income-related monthly adjustment amount (IRMAA) in 2026, with income thresholds rising by about 3%, further straining their healthcare budgets and reducing disposable income.
- Medicare Advantage Chaos: Major insurers like Humana and UnitedHealth have withdrawn Medicare Advantage offerings in hundreds of counties, reducing benefits for additional services; CEOs warn that the proposed 0.9% payment increase for 2027 could have a profoundly negative impact on seniors' benefits and access to care.
See More
Eli Lilly's Stock Rises Sharply Due to Increased Demand for GLP-1 Drugs
- Stock Performance: Eli Lilly's stock has surged 225% over the past three years, significantly outperforming the S&P 500's 66% gain, indicating strong performance in the GLP-1 drug market, although its high P/E ratio of 49 may deter some investors.
- Competitive Landscape: While Novo Nordisk ranks second in the GLP-1 drug market, its newly launched GLP-1 pill is seeing demand exceed expectations, potentially driving future growth, despite its stock being down 66% from 2024 highs.
- Medical Device Restructuring: Medtronic plans to spin off its diabetes business in 2026; although this division has been growing rapidly, its lower margins mean that the spinoff will enhance overall profitability and accelerate growth in its higher-margin sectors.
- Future Growth Potential: Despite Eli Lilly's strong performance in the GLP-1 market, Novo Nordisk's pill catalyst could help it regain momentum, while Medtronic's restructuring may unlock significant growth potential, making both companies worthy of investor attention.
See More
Analysis of Risks and Opportunities in Healthcare Stock Investment
- Valuation Insights: While the healthcare sector's forward P/E ratio stands at 18.7, lower than the S&P 500's 22.2, Eli Lilly's high P/E of 30.6 indicates market over-optimism about its growth, significantly increasing investment risk.
- Market Dynamics: Viking Therapeutics' stock fell by 8.6% following disappointing clinical trial results in late 2025, serving as a cautionary tale for investors considering buying at the peak popularity of stocks in the healthcare sector.
- Policy Impact Assessment: The implementation of drug price negotiations mandated by the Inflation Reduction Act in 2026 could pressure drugmakers' margins, making it essential for investors to monitor how such policy changes might affect healthcare revenues.
- Funding Flow Mechanism: In the U.S., healthcare funding comes from a mix of private insurance, public payers, and out-of-pocket spending, and understanding these funding flows and their potential shifts is crucial for investment decisions, especially in a changing policy landscape.
See More
Eli Lilly's Stock Soars 225%, Attracting Attention
- Eli Lilly's Strong Performance: Eli Lilly's stock has surged 225% over the past three years, significantly outperforming the S&P 500's 66% gain, indicating robust market performance and investor confidence.
- Novo Nordisk's Market Challenge: Although Novo Nordisk was first to market with a GLP-1 weight-loss drug, Eli Lilly's offerings have been better received, resulting in a 66% drop in Novo Nordisk's stock from its 2024 highs, highlighting competitive pressures.
- Medtronic's Business Restructuring: Medtronic plans to spin off its diabetes business in 2026; despite rapid growth in this division, its lower margins compared to other operations suggest that the spinoff will enhance overall profitability and growth potential.
- Future Growth Potential: Eli Lilly's past success does not guarantee future dominance, as Novo Nordisk's GLP-1 pill could revitalize its sales, while Medtronic's restructuring may unlock higher growth opportunities.
See More
