The Shifting Sands of the Weight-Loss Market: Opportunities Beyond the GLP-1 Hype
Even as Eli Lilly (NYSE: LLY) currently dominates investor attention with its blockbuster GLP-1 drugs, Mounjaro and Zepbound, a closer look reveals potential opportunities in the stocks of its competitors, Novo Nordisk (NYSE: NVO) and Pfizer (NYSE: PFE). The market isn’t a one-horse race and savvy investors may find value in companies currently facing headwinds.
Lilly’s Momentum: A Premium Priced In
Eli Lilly’s impressive 2025 performance – a 99% sales increase for Mounjaro and a 175% jump for Zepbound – has propelled its stock to a price-to-earnings ratio of 46. This reflects significant investor enthusiasm, but also suggests limited upside for value-focused investors. The dividend yield, at a modest 0.6%, further indicates that much of the potential return is already factored into the share price.
Novo Nordisk: Navigating Challenges and a Pill-Shaped Opportunity
Novo Nordisk, despite experiencing 31% growth in its obesity drug sales in 2025, has seen its stock price suffer. Concerns surrounding a pricing agreement with the U.S. Government are contributing to anticipated weak financial results in 2026. Still, the company’s stock, down 66% since mid-2024, now presents a more attractive valuation with a P/E ratio of 13 and a 3.9% dividend yield, supported by a 40% payout ratio.
Crucially, Novo Nordisk is poised to disrupt the market further with its newly launched GLP-1 pill. This oral formulation could significantly broaden access to weight-loss medication, potentially driving substantial growth in 2027 and beyond.
Pfizer: A Turnaround Story in the Making
Pfizer’s attempt to develop an internally generated GLP-1 drug failed, but the company is actively pursuing partnerships and acquisitions to enter the market. While not currently a leader in this space, Pfizer’s history of pharmaceutical innovation suggests it’s well-positioned to regain ground. Success in oncology and migraine treatments also provides diversification and potential growth avenues.
For investors willing to embrace a turnaround story, Pfizer offers a substantial 6.3% dividend yield. While the payout ratio currently exceeds 100%, the potential for future earnings growth could produce this dividend sustainable.
Understanding the Risks and Rewards
Investing in Novo Nordisk and Pfizer requires a contrarian mindset. Both companies are facing short-term challenges, but their long-term prospects remain promising. The key is to assess whether the current market pessimism has created a buying opportunity.
Pro Tip:
Don’t solely focus on the GLP-1 market. Diversification within the pharmaceutical sector is crucial. Pfizer’s advancements in oncology and migraine treatments offer additional growth potential.
FAQ: Navigating the Weight-Loss Drug Landscape
- Is Eli Lilly overvalued? Currently, its high P/E ratio suggests limited upside for value investors.
- What is Novo Nordisk’s biggest advantage? The introduction of an oral GLP-1 pill could significantly expand its market reach.
- Is Pfizer a risky investment? As a turnaround story, Pfizer carries more risk, but also offers potentially higher rewards.
- Are dividends sustainable for Novo Nordisk and Pfizer? Novo Nordisk’s dividend is well-covered, while Pfizer’s is currently high but could improve with earnings growth.
Did you understand?
The GLP-1 drug market is expected to reach hundreds of billions of dollars in the coming years, making it one of the most lucrative segments of the pharmaceutical industry.
Before making any investment decisions, consider consulting with a financial advisor and conducting thorough research. The Motley Fool Stock Advisor analyst team has identified their 10 best stocks for investors to buy now, and Pfizer wasn’t one of them.
*Stock Advisor returns as of February 11, 2026.
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.
Healthcare Stocks Are Sinking. Here Are 2 to Buy on the Dip. was originally published by The Motley Fool
