Image Source: Pixabay

Eli Lilly (LLY), a pharmaceutical leader in obesity and diabetes treatment, is back in the spotlight, and for good reason.

Its experimental weight-loss pill just crushed its Phase 3 trial and the company is doubling down with major investments on U.S. soil. But with the stock up 14% and expectations sky-high, is now a smart time to jump in?

Let’s break it down using the IDDA framework for beginner investors. Here’s how we do it:

Capital Analysis

 – Know your risk tolerance.

Intentional Analysis

 – Know your money goals and timelines.

Fundamental Analysis

 – Dive into the company’s performance and potential.

Sentimental Analysis

 – See what the market and media are really saying.

Technical Analysis

 – Use charts to spot key levels and trends.

IDDA Point 1 & 2: Capital & Intentional

Before investing in Eli Lilly (LLY), ask yourself:

• Are you investing for long-term growth in innovative healthcare?
• Can you handle a high stock price and elevated expectations?
• Are you comfortable with short-term market swings in exchange for massive long-term potential?

Eli Lilly is currently a high-growth, high-expectation stock. The company is leading the charge in obesity and diabetes treatments, with its new weight-loss pill orforglipron showing strong Phase 3 results. It’s also investing over $50 billion into U.S. manufacturing, which supports long-term scalability and aligns with reshoring trends in U.S. policy.

However, the stock has already surged in price, and competition in the weight-loss space is heating up. If you’re someone who gets nervous about buying at the top, you might prefer to wait for a dip—or build your position gradually.

But if you’re a long-term investor who wants exposure to game-changing health tech, Eli Lilly is a leader with strong momentum, a solid pipeline, and the infrastructure to support global growth.

IDDA Point 3: Fundamental Analysis

Latest Update

• New Drug: Orforglipron showed 8% average weight loss (16 lbs) in people with type 2 diabetes. It announced their Phase 3 trial results were strong and safe, with no major liver issues (a problem that forced Pfizer to cancel its own weight-loss pill).
• The new drug also offers advantages over competitors including easier manufacturing, no liver safety signals, and simpler administration than Novo Nordisk’s option.
• U.S. Manufacturing: Eli Lilly’s CEO announced that orforglipron will be manufactured in the United States, aligning with the government’s push to bring production back home.
• Massive Investment: The company is investing $27 billion in 4 new U.S. facilities, bringing its total U.S. manufacturing investment to over $50 billion. This puts Lilly in a great position to meet demand and stay on good terms with U.S. policymakers.

Why this matters:

Obesity and diabetes are two of the biggest public health challenges globally and Eli Lilly is stepping in as a leader with treatments for both. Orforglipron could give people the convenience of taking a daily tablet instead of an injection.

• The global obesity drug market is expected to grow massively—possibly reaching $100 billion over the next decade.
• Pills are easier to take, cheaper to make, and faster to distribute than injections.
• Many people avoid injections, so pills open up an even larger market.

Eli Lilly’s Financial Snapshot

Q4 2024 Revenue: $13.5 billion (up 32% from last year!)

• Full-Year Revenue (2024): $45 billion
• Cash in Hand: $3.3 billion
• Long-Term Debt: ~$28.6 billion (manageable given its earnings)
• Free Cash Flow Potential: Long-term margin of 25% looks sustainable as manufacturing costs normalize.

Key Products Driving Revenue:

• Mounjaro and Zepbound (for diabetes and weight loss)
• Verzenio (for breast cancer)
• Taltz (for psoriasis)

And it’s only getting started. The company expects to make $58–61 billion in revenue in 2025, which is a massive leap.

IDDA Point 4: Sentimental Analysis

Bulls:

Leading the way in obesity and diabetes with both injections and pills.

 Strong clinical data with great tolerability and safety.

 Massive U.S. manufacturing expansion shows they’re thinking long-term.

 Diversified revenue streams and strong fundamentals.

Bears:

Competition is fierce (Novo Nordisk, Pfizer, and others are racing ahead).

Overreliance on one main drug (tirzepatide – the ingredient in Zepbound and Mounjaro).

Expectations are sky-high, with high pressure to deliver. This means with any setback (e.g., safety concerns or manufacturing delays) could hurt the company and its stock price.

Regulatory or supply chain hiccups could shake investor confidence.

The current market sentiment is bullish resulting in its stock jumping 14% in one day after the orforglipron trial success. Analysts expect the pill to generate $8–10 billion a year in revenue after launch. Moreover, the announcement to build in the U.S. also won favor with the market and political leaders.

IDDA Point 5: Technical Analysis

Weekly Chart
Eli Lilly’s stock has shown impressive long-term growth. Back in 2019, the share price was around $105 and by 2024, it reached a new all-time high of $971. Currently, the stock is in a consolidation phase (meaning it’s moving sideways after a big climb). 

Last week, it dipped and tested the bottom of the Ichimoku Cloud, a popular indicator for trend direction. 

It bounced bck quickly, likely due to investor excitement around the new weight-loss pill and strong Q4 earnings.

(Click on image to enlarge)

Daily Chart
On a shorter-term view, the stock has been consolidating since July 2024, repeatedly testing a strong support level at $716. This level is considered “psychological” because it’s where buyers have consistently stepped in. Recently, the stock dipped again but bounced back to $839, breaking above the 23% Fibonacci retracement level. This rebound was fueled by the latest news on orforglipron and the strong earnings report.

Right now, the daily candlestick is sitting 

within

 the Ichimoku Cloud, which signals potential reversal in trend. 

The future cloud is still bearish

The Kijun line (trend baseline) is above the Tenkan line (short-term average), which is also a bearish signal.

This means the stock still has bearish signals in the short term, but it’s showing signs of strength. If upcoming trial results show better weight-loss outcomes (12–15%), the stock could continue climbing. However, if Eli Lilly misses expectations, especially with its pipeline or new product launches, the stock may pull back further.

(Click on image to enlarge)

Investors looking into getting in can consider these buy limit entry levels. 

BL ideas

813.39 (High Risk)

716.72 (Medium Risk)

638.74 (Low Risk – and it might not reach)

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices?

2. If I don’t buy at this price and the market suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Summary of Eli Lilly Stock Update

Eli Lilly (LLY) is making major progress in the weight-loss and diabetes space with strong results from its new once-a-day pill, Orforglipron, which helped people with type 2 diabetes lose around 8% of their body weight. This easy-to-take, cost-effective pill stands out because it avoids the safety issues seen in some competitor drugs.

Lilly plans to manufacture it in the U.S. and has already invested over $50 billion into building new U.S. facilities, aligning with efforts to bring more production home. The company’s sales have surged, up 32% last quarter, driven by high demand for its injectable drugs Zepbound and Mounjaro.

While there’s still competition and pressure to meet high expectations, Eli Lilly is well-positioned for future growth, especially if Orforglipron gets approved and launched by 2026. For long-term investors comfortable with some risk, this healthcare stock could be worth watching, provided it aligns with their risk tolerance and financial goals. 

---

More By This Author:

Estée Lauder In Crisis? What’s Really Going On With EL Stock In 2025
Could AppLovin Be The Next S&P 500 Addition? Here’s What Investors Need To Know
AMD Vs. China: Is This Chip Giant Too Cheap To Ignore?