In the battle between weight-loss drug companies, Eli Lilly has emerged as the clear winner for investors. The maker of Zepbound and diabetes treatment Mounjaro hit a $1 trillion market cap on Friday, making it the first health-care company to break through the mark. Novo Nordisk , on the other hand, saw shares tumble 6% on Monday after its Alzheimer’s trial failed to meet its main goal. The trial studied whether semaglutide, the active ingredient in its diabetes and weight loss drugs Ozempic and Wegovy, helped slow the progress of the disease. For many on Wall Street, the sell-off wasn’t surprising and didn’t necessarily provide a buying opportunity. Evan Seigerman, BMO Capital Markets analyst, said he prefers Eli Lilly over Novo Nordisk, even though the latter’s sell-off may be overdone. Eli Lilly is much more diversified than Novo Nordisk and is a stronger player in obesity, he said. “There’s always concern around what does the trillion dollar market cap mean for Lilly, and is that something to worry about,” he said. “Fundamentally, it highlights real confidence in the longevity of, not just their metabolic businesses, but all the businesses that they run.” Seigerman expects Eli Lilly’s experimental oral GLP-1 , orforglipron, to see good usage when it hits the market next year because he said it has a better profile than Novo Nordisk’s oral version of Wegovy . While the former doesn’t get as much weight loss, it doesn’t have to be timed with eating or drinking , he noted. “Oral Wegovy,” on the other hand, has to be taken in the morning 30 minutes before eating or drinking, he said. LLY YTD mountain Eli Lilly year to date Novo’s oral GLP-1 is currently under review with the Food and Drug Administration. Lilly said it plans to submit orforglipron for approval for obesity or overweight treatment in 2025 and for type 2 diabetes in 2026. Seigerman has outperform rating on Eli Lilly and a market perform rating on Novo Nordisk. Meanwhile, Jefferies believes some investors had stayed in Novo Nordisk on the hopes, albeit not high, for a positive outcome in the Alzheimer’s trial and the sell-off was simply those investors exiting the stock. “With top-line dynamics for 2026-2027E still heavily under debate, we believe it is unlikely investors will rush back into the name, and further multiple compression possible as the sema 2031/32E patent expiry looms,” Jefferies’ analyst Michael Leuchten said in a note Monday. Leuchten has an underperform rating on Novo Nordisk stock. NVO YTD mountain Novo Nordisk year to date Morgan Stanley also said the set-up from here remains challenging for Novo Nordisk. The firm, which remains underweight on the stock, sees limited scope for growth in 2026. Novo Nordisk also has a narrowing window to operate ahead of a major loss of exclusivity of semaglutide in 2031/2032, analyst Thibault Boutherin said in a note Monday. The Alzheimer’s trial results were enough to make HSBC downgrade Novo Nordisk to hold from buy on Monday. Even if the trial had not succeeded but still showed an improvement in cognitive decline, a lot of people would have used it off label, analyst Rajesh Kumar told CNBC. “The reality is, they’ve had a massive opportunity to be a market leader,” he said. “They have messed up on execution.” Eli Lilly catalysts ahead At the same time, investors remain bullish on Eli Lilly even as its valuation moves higher. The stock hit a 52-week high on Monday. Morgan Stanley is among those on Wall Street who expect continued share gains. On Sunday, the firm raised its price target on the stock to $1,290 from $1,171, suggesting more than 10% upside from Friday’s close. “LLY has the most robust new product cycle (and hence growth) outlook in Pharma as the company could launch additional three new drugs over the next three years in a large end market of diabesity,” analyst Terence Flynn said in a note to clients. The firm’s survey of primary care providers projects ongoing GLP-1 market growth for obesity and diabetes, with Eli Lilly continuing to gain share over Novo Nordisk, he noted. In addition, the survey suggests that Eli Lilly’s experimental oral GLP-1 could represent 30% of the company’s total GLP-1 mix a year after launch. Bernstein also raised its price target on Eli Lilly Monday to $1,300 from $1,100, implying nearly 23% upside from Friday’s close. The stock is now “beat-and-raise Orfo launch story,” said analyst Courtney Breen. “There is an incredibly rich catalyst path ahead … however the most meaningful stock moves will be tied to script trends and revenue realization in 2026,” she wrote in a note to clients. “We see an easy beat to consensus expectations for Orforglipron, with our conservative ’26 estimates of $1.8B (80k scripts per week in oral market + US only) far outpacing the current consensus of $550m.” Don’t count out Novo Nordisk However, there are some who see an opportunity to get into Novo Nordisk now that it has sold off. JPMorgan called the move an “overreaction.” “Overall, while the failure of semaglutide to show a benefit in Alzheimer’s does remove a potential upside driver, in reality there is limited to no impact on Novo forecasts,” analyst Richard Vosser said in a note Monday. He has an overweight rating on the stock. Jared Holz, health-care strategist at Mizuho Securities America, said the initial 9% drop in the stock brought it down to pre-Ozempic levels. “I do actually think it’s a buying opportunity,” he said. “Heading into next year, I think with some of the pricing negotiations behind them, I think it sets up to potentially be a better stock in 2026.” Holz sees Novo Nordisk more as a value stock, while it could be argued El Lilly isn’t even in the same peer group anymore. “For Eli Lilly, I just think the execution has been very solid,” he said. “The category of these oral weight loss medications is going to be probably close to $50 billion, and so it’s tough to get negative on Lilly when they’re set up this way. The only thing that kind of would concern me near term is the near-term momentum.”
