Eli Lilly (LLY) rose more than 10% in the past week and closed at $1417.54 on Oct. 30, after the company delivered a strong earnings report. The gain pushed the company’s market value above $1.33 trillion, close to a new record.
The main driver is two drugs you may have heard of: Mounjaro, which treats type 2 diabetes, and Zepbound, which is used for weight loss.
Both of them fall under GLP-1 drugs, a class of medicines that imitate a natural hormone that helps people feel full and eat less. Both are injections, and demand keeps growing. That demand is also showing up directly in Lilly’s results.
After the strong earnings report, Morgan Stanley raised its price target to $1,596 from $1,430, as seen in a Morgan Stanley research note shared with me. That points to an increase of about 13% from Friday’s close.
Morgan Stanley raises Eli Lilly target to $1,596 on obesity demand
In the Morgan Stanley note shared with me, analyst Terence C. Flynn kept his Overweight rating on Lilly. He said the company’s latest results confirm that Lilly’s weight-loss business is still in a strong growth phase.
“We see LLY’s 3Q results and upgraded 2026 guidance as supportive of our positive outlook for LLY’s GLP-1 franchise and the global growth/development of the obesity market,” Flynn wrote in the note.
Also read: Novo Nordisk’s CEO delivered a warning that sank its stock by 8%
The company’s third-quarter numbers back up his view. Lilly reported Q3 revenue of $24.4 billion, up 39% from a year earlier, according to the company’s SEC filing.
Then Lilly‘s management raised the company’s full-year 2026 revenue outlook to between $91 billion and $92 billion. Previously, that range was between $85 billion and $87 billion.
One factor that raised management’s confidence was combined sales for Mounjaro and Zepbound, which reached $16.1 billion for the quarter.
Why Zepbound and Mounjaro keep breaking sales records
Both Mounjaro and Zepbound contain the same active ingredient, tirzepatide, which helps calm appetite and improve blood sugar control.
The reduced appetite helps patients lose weight, and to maintain that control, many people stay on the drug for a long time. So each new user becomes steady revenue for Lilly.
Related: Medicare just handed Eli Lilly a massive weight-loss win
In the United States, Lilly now holds a 63% share of the GLP-1 market. The overall market also grew 32% year over year.
Growth outside the U.S. looked just as strong, and Morgan Stanley now models Lilly’s full incretin and obesity portfolio to reach close to $100 billion in global sales by 2030.
The Medicare bridge program expanding patient access
Another boost to Lilly’s business is the Medicare GLP-1 Bridge program that started on July 1. The Bridge program lets about 20 million older Americans who are clinically eligible get GLP-1 drugs for $50 a month.
Lilly said more than 500,000 patients have signed up for the program already, and 80% of them had never tried a GLP-1 drug before, Yahoo Finance reported.
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The Bridge program signals that insurers everywhere might start covering obesity drugs. Lilly’s management told analysts that “all signals suggest that the program will be cost-effective” and that it could lead to permanent coverage.
Risks investors should think about before chasing the rally
Even with its strong performance, Lilly still carries some risks. Flynn has a price target for a bear case that sits at $655, more than 50% below the stock’s current price.
If the company’s next big obesity drug, eloralintide, fails in its late-stage trials, or if rivals catch up, the bear case could play out.
The Motley Fool also pointed out that Lilly now trades at about 42 times forward earnings, which means the company can’t afford a weak result. Any slowdown in performance could quickly knock the stock lower.
The company’s next big test comes at Lilly’s Dec. 7 Investment Community Meeting. On that day, the company will walk investors through its drug pipeline, and I believe that will set the tone for how the stock trades into early 2027.
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