This week's U.S Stock (20th Dec. 2025)

I've tracked Eli Lilly (LLY) for quite a time—it's evolved from a steady pharma player into a blockbuster growth engine, fueled by its GLP-1 dominance in obesity and diabetes. As of December 19, 2025, LLY stands as a top conviction pick for long-term investors, especially Korean allocators seeking high-growth healthcare exposure amid KRW weakness and tech volatility.

1. Company Overview

Eli Lilly develops innovative medicines in oncology, immunology, neuroscience, and cardiometabolic health. Its transformation hinges on incretin-based therapies: Mounjaro (diabetes) and Zepbound (obesity) via tirzepatide, a dual GLP-1/GIP agonist. These outperform competitors like Novo Nordisk's Ozempic/Wegovy, driving explosive growth. Market cap nears $950B, positioning LLY among the world's most valuable companies.

2. Recent Financial Performance (Q3 2025 & TTM)

• Revenue (TTM): $59.42B, up ~50% YoY from GLP-1 franchise strength.
• Net Income (TTM): $18.41B, with profit margins at 31%—elite for pharma.
• Key Products: Mounjaro/Zepbound combined exceed $10B quarterly run-rate; Verzenio (oncology) and others contribute steadily.
• ROE: 96.47%—exceptional capital efficiency.
• Balance Sheet: Debt/Equity ~179% (manageable with massive cash flows); investing heavily in manufacturing ($6B+ plants) to resolve supply constraints.
• Stock Performance: Up ~70-80% YTD through December 18 (closing ~$1,057, +1.9% that day), near highs but with recent momentum from pipeline wins.

3. Valuation Assessment

• Current Price (Dec 18 close): ~$1,057
• Trailing P/E: 51.8x (premium reflects past growth)
• Forward P/E: 33.2x (more reasonable, baking in 40-50% EPS growth)
• Analyst Consensus: Strong Buy, average target ~$1,093 (3-5% upside), with bullish calls to $1,268 (BofA) or $1,383 (Trefis models). Some DCF analyses suggest 20%+ undervaluation long-term. LLY trades at a premium to peers (e.g., Novo Nordisk ~30-35x forward), but justified by superior efficacy and pipeline depth—it's "priced for excellence" but not overextended given the $150B+ global obesity market opportunity.

4. Key Growth Drivers & Pipeline Catalysts

• GLP-1 Dominance → Tirzepatide leads with better weight loss (~20-25%) and outcomes than semaglutide. Recent data shows Zepbound users maintain loss even after switching to oral therapies.
• Next-Gen Pipeline →
  • Retatrutide (triple agonist): Phase 3 triumphs with ~26-29% weight loss (best-in-class), plus knee osteoarthritis pain relief—multiple readouts into 2026.
  • Orforglipron (oral GLP-1): Late-stage data confirms sustained weight control post-injection; potential approval 2026+, easing access vs. injectables.
• Manufacturing Ramp → Supply shortages easing, enabling fuller demand capture.
• Macro Tailwinds → Global obesity epidemic (ties into Korea's health/beauty trends and diabetes prevalence); partnerships (e.g., Korean biotechs) add local relevance.

Analysts project 30-35% revenue growth into 2026+, with EPS compounding at high teens.

5. Risks to Consider

• Competition — Novo Nordisk intensifying (e.g., Cagrisema data), but LLY's efficacy edge holds; pricing wars (discounts, vials) could pressure margins short-term.
• Regulatory/Pricing Pressure — U.S. policy risks (e.g., Medicare negotiations) or global reimbursement hurdles.
• Execution — Supply delays or safety signals in trials.
• Valuation Sensitivity — At 50x+ trailing, any pipeline setback could trigger 10-20% pullbacks (seen earlier in 2025).

Downside mitigated by wide moat and secular demand—Novo has borne more pain from competition/pricing this year.

Recommendation for Korean Investors

LLY offers rare high-conviction growth in a mature sector—allocate 6-10% in growth sleeves, dollar-cost average on dips below $1,000. It diversifies tech-heavy portfolios (low correlation to semis) and hedges longevity/inflation themes mirroring Korea's demographics.

This isn't a "cheap" defensive like UNH—it's a structural winner for 3-5+ year horizons, with potential to double again by 2030 on obesity expansion.

If pharma growth aligns with your risk tolerance (vs. undervalued defensives), LLY remains a core holding in my book. Thoughts on position sizing or comparisons (e.g., vs. Novo)? Happy to refine! 🚀