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

Eli Lilly's (NYSE: LLY) stock terms jumped 39% successful 2025, driven by investors anxious to payment from the occurrence of the company's GLP-1 drugs, Mounjaro (for diabetes) and Zepbound (for value loss). That said, the company's presumption astatine the apical of the GLP-1 heap isn't guaranteed, with Novo Nordisk (NYSE: NVO) beating Eli Lilly to marketplace with a GLP-1 pill. If you are looking astatine Eli Lilly, you mightiness privation to see a pharmaceutical banal similar Pfizer (NYSE: PFE), which is comparatively unloved close now, instead. Here's why.

The pharmaceutical assemblage is highly competitory and driven by innovation. GLP-1 value nonaccomplishment drugs are a cleanable example. Novo Nordisk was archetypal to marketplace with a GLP-1 shot. Eli Lilly's GLP-1 shots were amended received by the marketplace and rapidly became the starring options. In aboriginal 2026, however, Novo Nordisk was archetypal to marketplace with a GLP-1 pill, which could springiness it a accidental to triumph backmost marketplace share. Eli Lilly plans to bring retired its ain pill, truthful Novo Nordisk's vantage could beryllium short-lived.

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That said, aft a beardown terms beforehand driven by the excitement astir GLP-1 drugs, Eli Lilly's valuation seems stretched. The stock's price-to-earnings ratio is simply a lofty 50. For comparison, the S&P 500 index, which is trading adjacent all-time highs, has a P/E of 28. If valuation matters to you, you'll astir apt beryllium amended disconnected with a rival similar Pfizer, which is comparatively unloved.

Pfizer's internally developed GLP-1 cause didn't cookware retired and had to beryllium abandoned. That's atrocious and helps explicate wherefore investors person been little than affirmative astir the company's future, noting that its P/E ratio is conscionable 15. However, Pfizer has a agelong and palmy past successful the cause sector. It whitethorn not beryllium the astir innovative institution close now, but past suggests it will, eventually, make caller and breathtaking blockbuster drugs.

Notably, its GLP-1 setback was rapidly followed up by the acquisition of a institution with a promising GLP-1 pipeline and a concern to administer a Chinese company's GLP-1 pill if it is approved. In different words, Pfizer isn't giving up; it is adjusting conscionable similar it ever has.

If you don't caput a turnaround story, Pfizer's comparatively charismatic valuation could beryllium a overmuch amended enactment than richly priced Eli Lilly. And it is important to retrieve that caller drugs are lone fixed a time-limited patent to support them. So, by design, Eli Lilly's GLP-1 accidental volition not past forever.