Eli Lilly’s next-generation pharmaceutical candidate, Retatrutide, has delivered positive results in a pivotal late-stage trial, yet the company’s shares face pressure from a lone but vocal bearish analyst.
Clinical Trial Results and Future Data
In the Phase 3 TRANSCEND-T2D-1 study, the triple-agonist drug Retatrutide demonstrated significant efficacy in treating Type 2 diabetes. Over a 40-week period, it reduced HbA1c levels by an average of 1.7 to 2.0 percentage points, a substantial improvement compared to the 0.8 percentage point reduction seen in the placebo group. Participants receiving the highest 12 mg dose experienced an average weight loss of approximately 16.8 kilograms, with no observed plateau in effect.
While the data is robust, analysts noted the HbA1c reduction was marginally less pronounced than that achieved by Lilly’s existing drug, Mounjaro (Tirzepatide), which posted reductions between 1.7 and 2.4 percentage points after 40 weeks. The complete dataset from this trial is scheduled for presentation in June 2026 at the American Diabetes Association’s scientific sessions. The market anticipates seven additional Phase 3 readouts for Retatrutide later this year, covering indications including obesity, sleep apnea, and cardiovascular outcomes.
A Contrarian Voice from HSBC
Despite the clinical progress, HSBC struck a dissonant chord on March 17 by downgrading Eli Lilly’s stock to “Reduce” and slashing its price target from $1,070 to $850. Analyst Rajesh Kumar expressed skepticism that the market for weight-loss medications can meet current lofty expectations. While consensus estimates point to an addressable market of around $150 billion by 2030, Kumar’s analysis suggests a potential range of only $80 to $120 billion by 2032, citing impending price pressures as a key constraint. HSBC also cautioned that expectations for Lilly’s oral GLP-1 candidate, Orforglipron, may be overly optimistic.
Should investors sell immediately? Or is it worth buying Eli Lilly?
This view remains an outlier. Among the more than 30 analysts tracked by Bloomberg, HSBC stands alone with a sell rating. The consensus price target sits near $1,221, implying an upside potential of roughly 35%. Sentiment is overwhelmingly positive, with 25 of the last 30 analyst actions being buy recommendations.
Upcoming Catalyst and Financial Backdrop
The next significant near-term catalyst for the stock is the U.S. Food and Drug Administration’s decision on Orforglipron. According to Reuters, the regulatory action date is set for April 10, 2026. A potential advantage for this oral candidate is that, unlike Novo Nordisk’s currently available weight-loss treatment, it does not need to be taken on an empty stomach, which could improve patient adherence.
Eli Lilly’s shares have declined about 15% since the start of the year, underperforming the S&P 500, which is down only around 2% over the same period. The company’s financial foundation remains strong, supported by its own 2026 revenue forecast of $80 to $83 billion—representing growth of approximately 25%—and powerful fourth-quarter results that saw revenue surge 43% to $19.3 billion. An FDA approval for Orforglipron in April has the potential to swiftly reshape the current debate surrounding the stock’s valuation.
Ad
Eli Lilly Stock: Buy or Sell?! New Eli Lilly Analysis from March 25 delivers the answer:
The latest Eli Lilly figures speak for themselves: Urgent action needed for Eli Lilly investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from March 25.
Eli Lilly: Buy or sell? Read more here...
