POLAND – 2025/09/07: In this photo illustration, the Eli Lilly and Company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Eli Lilly stock (NYSE: LLY) is up 10% this month, a rise driven by strong clinical trial progress. This includes the announcement of positive Phase 3 results in October 2025 for its oral GLP-1 drug, orforglipron, specifically for diabetes management and weight loss. Investor confidence has further been boosted by speculation that orforglipron could receive expedited FDA approval.
See, LLY stock warrants your attention. Why? Because it offers monopoly-like high margins at a discounted price. Here are some figures.
Though revenue growth is beneficial, this is not merely a growth perspective. Pricing power and high margins yield consistent, predictable profits and cash flows, which mitigate risk and enable capital reinvestment. The market tends to reward this.
As a brief background, Eli Lilly offers innovative pharmaceuticals globally, including treatments for cancer, rheumatoid arthritis, and autoimmune conditions like psoriasis and ankylosing spondylitis.
But do these figures provide the entire picture? Read Buy or Sell LLY Stock to determine if Eli Lilly retains an advantage that still holds up under scrutiny.
Investing in a single stock can be risky, but there is significant value in a broader, diversified approach we adopt with Trefis High Quality Portfolio. Trefis collaborates with Empirical Asset Management – a wealth manager based in the Boston area – whose asset allocation strategies produced positive returns during the 2008-09 period when the S&P declined by more than 40%. Empirical has integrated the Trefis HQ Portfolio into this asset allocation framework to provide clients with better returns and reduced risk compared to the benchmark index, resulting in a smoother investment experience, as illustrated by HQ Portfolio performance metrics.
Stocks Like These Can Outperform. Here Is The Data
Here is how we select stocks: We target stocks with a market cap greater than $10 billion and then filter out those with high CFO (cash flow from operations) margins or operating margins. Furthermore, we only consider those stocks that have significantly dropped in valuation over the past year.
Below are statistics for stocks where this selection strategy has been implemented since 12/31/2016.
- Average 12-month forward returns of around 19%
- 12-month win rate (the proportion of picks returning positive) of approximately 72%
But Consider The Risk
Nevertheless, Eli Lilly is not immune to substantial declines. It declined by 51% during the Global Financial Crisis and 43% during the Dot-Com bubble. Even during more recent challenges, such as the 2018 correction, inflation shock, and COVID-19 pandemic, it still faced declines between 18% and 22%. Therefore, despite solid fundamentals, this stock can suffer a significant blow when the market turns unfavorable.
Remember, investing in a single stock without comprehensive analysis can be risky. Consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.