Eli Lilly Soared by 39% in 2025, but Here's Another Healthcare Stock to Buy in 2026

Eli Lilly's (NYSE: LLY) share price jumped 39% in 2025, driven by investors eager to benefit from the success of the company's GLP-1 drugs, Mounjaro (for diabetes) and Zepbound (for weight loss). That said, the company's position at the top of the GLP-1 heap isn't guaranteed, with Novo Nordisk (NYSE: NVO) beating Eli Lilly to market with a GLP-1 pill. If you are looking at Eli Lilly, you might want to consider a pharmaceutical stock like Pfizer (NYSE: PFE), which is relatively unloved right now, instead. Here's why.

Eli Lilly won't always be on top

The pharmaceutical sector is highly competitive and driven by innovation. GLP-1 weight loss drugs are a perfect example. Novo Nordisk was first to market with a GLP-1 shot. Eli Lilly's GLP-1 shots were better received by the market and quickly became the leading options. In early 2026, however, Novo Nordisk was first to market with a GLP-1 pill, which could give it a chance to win back market share. Eli Lilly plans to bring out its own pill, so Novo Nordisk's advantage could be short-lived.

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That said, after a strong price advance driven by the excitement around GLP-1 drugs, Eli Lilly's valuation seems stretched. The stock's price-to-earnings ratio is a lofty 50. For comparison, the S&P 500 index, which is trading near all-time highs, has a P/E of 28. If valuation matters to you, you'll probably be better off with a competitor like Pfizer, which is relatively unloved.

Pfizer is playing catch-up

Pfizer's internally developed GLP-1 drug didn't pan out and had to be abandoned. That's bad and helps explain why investors have been less than positive about the company's future, noting that its P/E ratio is just 15. However, Pfizer has a long and successful history in the drug sector. It may not be the most innovative company right now, but history suggests it will, eventually, develop new and exciting blockbuster drugs.

Notably, its GLP-1 setback was quickly followed up by the acquisition of a company with a promising GLP-1 pipeline and a partnership to distribute a Chinese company's GLP-1 pill if it is approved. In other words, Pfizer isn't giving up; it is adjusting just like it always has.

If you don't mind a turnaround story, Pfizer's relatively attractive valuation could be a much better option than richly priced Eli Lilly. And it is important to remember that new drugs are only given a time-limited patent to protect them. So, by design, Eli Lilly's GLP-1 opportunity will not last forever.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.