Eli Lilly and Company (LLY): A Bull Case Theory

We came across a bullish thesis on Eli Lilly and Company on Arya’s Substack by Arya. In this article, we will summarize the bulls’ thesis on LLY. Eli Lilly and Company's share was trading at $695.33 as of August 25^th. LLY’s trailing and forward P/E were 45.45 and 30.49 respectively according to Yahoo Finance.

Eli Lilly & Co. (LLY) suffered a historic ~14% drop on August 7, 2025, its steepest single-day decline in over two decades, triggered by disappointing Phase III data for orforglipron, its highly anticipated oral obesity pill. While the trial showed meaningful weight loss, results fell short of expectations and raised questions about side effects and adherence, leading to a sharp reassessment of Lilly’s long-term obesity narrative.

However, the setback belies the company’s broader trajectory. Lilly is growing at an unprecedented pace for a pharma of its size, with Q2 2025 revenues up 38% year-over-year to $15.6 billion, driven by its blockbuster GLP-1 franchise, Mounjaro for diabetes and Zepbound for obesity—which together generated over half of quarterly sales.

These products, already outpacing Novo Nordisk’s benchmarks, position Lilly as the clear leader in the metabolic disease market, a sector projected to reach $100 billion by 2030. Beyond obesity and diabetes, Lilly is diversifying with Alzheimer’s therapy Kisunla, oncology drug Verzenio, and new immunology assets, all supported by heavy reinvestment into R&D and a pipeline that includes next-generation incretin therapies like retatrutide.

Despite its pullback to ~$640/share, Lilly still trades at a premium multiple, but its valuation is justified by rapid earnings growth and transformative potential across multiple therapeutic areas. With catalysts such as additional trial readouts, regulatory approvals, and potential Medicare coverage for obesity drugs, Lilly could exceed $80 billion in revenue by 2027, supporting a stock near $1,000. For long-term investors, this correction may represent a generational buying opportunity in a company redefining global healthcare.

Previously we covered a bullish thesis on Eli Lilly and Company (LLY) by Kontra in May 2025, which highlighted leadership in obesity and diabetes through its GLP-1 portfolio. The company’s stock price has depreciated approximately by 12% since our coverage. This is because orforglipron trial data disappointed. The thesis still stands as GLP-1 strength offsets setbacks. Arya shares a similar view but stresses the pullback as a buying opportunity.

Eli Lilly and Company is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 119 hedge fund portfolios held LLY at the end of the first quarter which was 115 in the previous quarter. While we acknowledge the potential of LLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.