ClearBridge Large Cap Growth Strategy's Thoughts on Eli Lilly and Company (LLY)

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” fourth-quarter 2025 investor letter. The investment philosophy of the strategy is to invest in leading companies that are undervalued by the market in terms of their future growth potential. A copy of the letter can be downloaded here. Large-cap stocks continued their strength in the quarter, driven by strong earnings growth from mega-cap companies and enthusiasm over generative AI. The ClearBridge Large Cap Growth Strategy underperformed the Russell 1000 Growth Index by approximately 900 basis points for the year. It continued to lag behind the benchmark, trailing its 1.2% quarterly advance by about 170 basis points during the fourth quarter. The underweight exposure to mega-cap AI beneficiaries and lower-quality AI-related names contributed to the underperformance. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy highlighted stocks such as Eli Lilly and Company (NYSE:LLY). Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company headquartered in Indianapolis, Indiana. The one-month return of Eli Lilly and Company (NYSE:LLY) was 9.78%, and its shares gained 40.76% of their value over the last 52 weeks. On January 7, 2026, Eli Lilly and Company (NYSE:LLY) stock closed at $1,108.09 per share, with a market capitalization of $993.355 billion.

ClearBridge Large Cap Growth Strategy stated the following regarding Eli Lilly and Company (NYSE:LLY) in its fourth quarter 2025 investor letter:

"We were too early in exiting pharmaceutical maker Eli Lilly and Company (NYSE:LLY), which we sold in July at what we viewed as fair value and due to uncertainty over reimbursements for GLP-1 treatments for diabetes and obesity and the continued prevalence of lower-priced competition. Since then, the U.S. government has struck a deal with Lilly to offer GLP-1s to Medicare and Medicaid patients, opening up millions of additional prescriptions, while readouts on the company’s oral GLP-1 treatment indicated a broader market than we had expected. Lilly shares surged in the fourth quarter, causing our lack of exposure to be a drag on relative results."

Eli Lilly and Company (NYSE:LLY) is in 21st position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 114 hedge fund portfolios held Eli Lilly and Company (NYSE:LLY) at the end of the third quarter, compared to 119 in the previous quarter. In the third quarter of 2025, Eli Lilly and Company’s (NYSE:LLY) revenue grew 54% compared to the same period last year. While we acknowledge the potential of Eli Lilly and Company (NYSE: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.

In another article, we covered Eli Lilly and Company (NYSE:LLY) and shared the list of best unstoppable growth stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.