Barclays names 2 drug stocks investors should own in 2026

Core Viewpoint - The pharmaceutical sector is positioned as a favorable investment opportunity amidst concerns about AI's impact on jobs in other industries, according to Barclays analyst Emily Field [1][2]. Industry Overview - Barclays initiated coverage of U.S. large-cap biopharma with a Neutral sector view, highlighting that pharma is leveraging AI to enhance drug discovery and testing, distinguishing it from sectors facing disruption [2][3]. Company Highlights: Eli Lilly - Eli Lilly reported a strong Q4 2025, with revenue reaching $19.3 billion, a 43% increase year over year, surpassing analyst expectations [4]. - The company expects 2026 revenue to be between $80 billion and $83 billion, indicating approximately 25% growth from 2025 [5]. - Eli Lilly's obesity drug Zepbound generated $4.2 billion in U.S. revenue in Q4, reflecting a 122% year-over-year increase, capturing nearly 70% of new obesity prescriptions [5][7]. - Mounjaro, another key product, saw worldwide revenue rise by 110% in Q4 to $7.4 billion, holding over 55% of new U.S. type 2 diabetes prescriptions [7]. Analyst Ratings and Price Targets - Barclays rated Eli Lilly as Overweight with a price target of $1,350, suggesting about 28% upside from current levels around $1,052 [6]. - The broader Wall Street consensus for Eli Lilly is a Strong Buy, with an average target of $1,248 from 19 analysts [6].