Interested in the Weight-Loss Market? Here’s 1 Stock to Buy Hand Over Fist in 2024, and 1 to Avoid Like the Plague.

When it comes to the pharmaceutical industry, weight-loss medications are all the rage right now. While Ozempic maker Novo Nordisk dominates medications designed to treat obesity and diabetes, two other companies are looking to get their slice of the pie — but only one is succeeding.

Let’s break down some alternatives to Novo Nordisk, and assess why one competitor looks like a great buy in 2024 while the other appears too risky.

The stock to buy hand over fist: Eli Lilly

Eli Lilly (NYSE: LLY) manufactures a diabetes treatment called Mounjaro. Chances are you’ve seen the commercials for the drug or may even know people who are prescribed it. Although Mounjaro has only been commercially available since mid-2022, demand for this medication is off the charts. Mounjaro generated $3 billion in revenue through the first nine months of 2023, making it Eli Lilly’s second-largest top-line contributor.

And just last month, the Food and Drug Administration (FDA) approved Mounjaro’s sister product, Zepbound. While Mounjaro is used to treat diabetes, Zepbound’s focal area is obesity. This is a major development for Eli Lilly as the company faces a fierce contest with Novo Nordisk.

By some estimates, the market for weight-loss medications could reach $200 billion by 2030. Although it’s probably too early to know whether these forecasts are accurate, the main takeaway is that the demand for products like Ozempic, Wegovy, Rybelsus, or Mounjaro don’t seem to be going away. Now, with the approval of Zepbound, Eli Lilly is well-positioned to acquire additional market share in the growing diabetes and obesity markets.

The thing investors should keep in mind is that Eli Lilly’s stock has rocketed 56% in 2023 thanks to its all-around successful portfolio. As of now, Eli Lilly stock trades at a forward price-to-earnings (P/E) multiple of 87 — roughly quadruple that of the S&P 500. It’s clear that the capital markets are placing a premium on Eli Lilly and are bullish on the company’s…