1 Undervalued Growth Stock Down 8% to Buy Before 2026

Core Viewpoint - Eli Lilly is experiencing a temporary stock pullback, presenting a buying opportunity as the company's long-term prospects remain strong and shares appear undervalued [1][2]. Valuation Metrics - Eli Lilly is trading at 27 times forward earnings, significantly above the healthcare industry average of 17.5 [3]. - Despite the high valuation, the company's ability to grow revenue and earnings faster than the industry average justifies this premium [5]. Future Growth Drivers - The market for weight management medicines is expected to grow, driven by breakthroughs in the field and an increasing population of overweight individuals [6]. - Eli Lilly's drug tirzepatide, marketed as Zepbound, is projected to generate peak annual sales of $25 billion, with current sales already reaching $14.7 billion in the first half of the year [7]. - New projections suggest tirzepatide could achieve sales of nearly $62 billion by 2030, placing it in a unique category of high-performing therapies [8]. Additional Growth Opportunities - Eli Lilly is nearing the launch of orforglipron, an oral GLP-1 medicine that has shown promising results in late-stage clinical trials [9][10]. - Orforglipron could generate up to $12.7 billion in sales by 2030, contributing to Eli Lilly's potential to become the world's top-selling pharmaceutical company [11]. Dividend Program - Eli Lilly has consistently increased its dividend payouts, doubling the dividend over the past five years, with a payout ratio of 37% indicating room for further increases [12]. - Although the forward yield is relatively low at 0.7%, the overall dividend profile remains strong, making Eli Lilly an attractive option for both income and growth investors [13].