Should You Forget Eli Lilly and Buy These Unstoppable Stocks Instead?

Over short periods, Wall Street is driven by emotions. Over the long term, fundamentals start to matter. Right now, investors are extremely excited about GLP-1 weight loss drugs. That focus has Eli Lilly (NYSE: LLY) in the spotlight. Other drugmakers are waiting in the wings and may present a more compelling investment story if you think in decades and not days.Eli Lilly is a well-run pharmaceutical company. Right now, it has the leading GLP-1 drugs, with its injection-based Mounjaro and Zepbound. GLP-1 drugs represent a major advance in weight loss treatment, so the excitement around them isn't misplaced. However, Wall Street has gotten a bit overexcited about Eli Lilly's future, pushing its price-to-earnings ratio up to 51. That's a massive figure on an absolute basis, noting that the S&P 500's (SNPINDEX: ^GSPC) average P/E is around 28.If you care about valuation at all, you'll likely want to avoid Eli Lilly. Notably, it is already facing competition in the GLP-1 space, with Novo Nordisk (NYSE: NVO) recently introducing a pill version of its weight loss drug. Consumers tend to prefer pills over shots. The big takeaway from this new GLP-1 variant, however, is that Eli Lilly's position at the top of the GLP-1 pack isn't guaranteed. The lofty valuation the stock is being afforded could quickly shrink if another company's GLP-1 drug is better received by the market.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool