Morgan Stanley flags vital Eli Lilly signal for 2026

Picture a drug so popular that, even in markets where a cheaper generic competitor had just launched, it still grew by 10%. That’s what happened to Eli Lilly’s (LLY) Mounjaro in India recently. And it’s the kind of detail that makes Morgan Stanley think Wall Street still isn’t giving Lilly’s international story enough credit.

Four consecutive quarters of beating overseas sales estimates. A 53% share of the international GLP-1 market. Mounjaro now available in more than 55 countries. The numbers are impressive, but Morgan Stanley’s new analysis suggests the consensus forecasts for 2026 may still be too conservative, according to a note shared with me at TheStreet.

Lilly CEO David Ricks set the tone after a blockbuster Q1. “2026 is off to a strong start,” he said in a company statement. “We delivered 56% revenue growth in the first quarter and raised our full-year revenue guidance by $2 billion.”

Morgan Stanley is reiterating its Overweight rating on the 150-year-old pharmaceutical with a $1,344 price target, and laying out exactly why the international GLP-1 opportunity may be bigger than the market thinks.

Why Mounjaro’s international sales keep beating expectations

Lilly reported Mounjaro outside-the-United-States (OUS) revenue of $4.4 billion in Q1 2026, up from $3.3 billion in Q4 2025, according to the company’s first-quarter 2026 financial results statement. That beat marked the fourth consecutive quarter of international outperformance versus consensus estimates.

The driver isn’t primarily diabetes anymore. My review of the data tells an interesting story about what’s actually fueling the growth:

  • OUS obesity-related GLP-1 revenue: approximately $4 billion by Q1 2026, running at a roughly $16 billion annual rate
  • OUS Type 2 diabetes (T2D) GLP-1 revenue: roughly $400 million to $500 million per quarter, or about a $2 billion annual rate
  • Current OUS product mix: approximately 75% weight management and 25% T2D, according to the Morgan Stanley note
    Source: Morgan Stanley note shared with me at TheStreet

In other words, obesity adoption – not diabetes treatment – is now the primary engine of Mounjaro’s international growth. That’s a meaningful shift from where the product started.

Market share figures underscore the momentum. Mounjaro holds roughly 53% of the international incretin market overall, rising to approximately 60% in markets such as Brazil and Korea, according to Morgan Stanley. In Europe, where prescription data is most transparent, Lilly’s share has exceeded 55% since the obesity rollout began in early 2024.

For the full GLP-1 franchise, including Mounjaro, Zepbound, and Foundayo, Morgan Stanley models $60.3 billion in 2026 worldwide revenue and $70 billion in 2027, against consensus estimates of $55.6 billion and $67 billion, respectively.

ANGELA WEISS / AFP via Getty Images

How Morgan Stanley’s Mounjaro OUS forecasts stack up against consensus

This is where the upgrade thesis gets specific. Morgan Stanley already models Mounjaro OUS estimates above consensus, and its new analysis suggests even those numbers could prove conservative.

Morgan Stanley’s quarterly OUS Mounjaro sales forecasts vs. consensus:

  • Q2 2026: Morgan Stanley at $4.8 billion vs. consensus at $4.5 billion
  • Q3 2026: Morgan Stanley at $5.0 billion vs. consensus at $4.6 billion
  • Q4 2026: Morgan Stanley at $5.3 billion vs. consensus at $4.7 billion
    Source: Morgan Stanley.

For the full GLP-1 franchise, including Mounjaro, Zepbound, and Foundayo, Morgan Stanley models $60.3 billion in 2026 worldwide revenue and $70 billion in 2027, against consensus estimates of $55.6 billion and $67 billion, respectively, according to the note.

I did the math on the numbers in the scenario analysis Morgan Stanley ran. For Lilly to merely meet the firm’s existing forecasts, its international market share would need to decline by two percentage points per quarter from current levels – a scenario the firm describes as unlikely absent a major competitive or pricing shift.

The China and India wildcard for Lilly’s international GLP-1 story

Two markets are worth watching closely heading into the rest of 2026, and both carry different risks and opportunities.

In India, generic semaglutide – Novo Nordisk’s (NVO) competing molecule – has already launched. The expected outcome was market share pressure. What actually happened was a “halo effect,” with Mounjaro growing roughly 10% despite the competition, according to the Morgan Stanley note. Category awareness expanded, and Lilly benefited.

Related: BofA sees more upside in Eli Lilly stock

China is more nuanced. Mounjaro was added to China’s National Reimbursement Drug List (NRDL) effective January 1, 2026. That’s a development that creates near-term pricing pressure but could support stronger volume growth later in the year, according to the note. Generic semaglutide in China appears delayed into 2026 for the T2D indication, with obesity potentially following even later, based on disclosures from Jiuyuan Gene and Livzon Pharma Group, according to the note.

The combination of reimbursement expansion and delayed generic competition in China could make it a meaningful volume driver in the second half of 2026.

Foundayo approval and Lilly’s pipeline add another layer to the bull case

The international Mounjaro story is the focus of Morgan Stanley’s note, but it doesn’t exist in isolation.

Lilly received U.S. Food and Drug Administration (FDA) approval for Foundayo (orforglipron) during Q1 2026, making it the only approved oral GLP-1 pill that can be taken any time of day without food or water restrictions, according to a company statement.

Ricks called it “a key milestone” that “will meaningfully expand the number of people who can benefit from GLP-1s.” An oral option removes one of the biggest friction points in GLP-1 adoption – the injection – potentially opening the market to an entirely new patient population.

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Morgan Stanley’s $1,344 price target is based on a 27 times price-to-earnings (P/E) multiple applied to its 2027-2028 earnings per share (EPS) estimate of $49.76, roughly in line with Lilly’s 10-year historical average of 28 times, according to the note.

LLY shares were trading at $1,006.70, up 41.73% over the past year and 436.94% over five years, according to Yahoo Finance data as of May 14, 2026. The S&P 500 returned 27.30% and 79.72% over those same periods.

The risks are real. Generic competition, pricing fragmentation, and pipeline setbacks could all pressure the thesis. But four consecutive quarters of international beats, a newly approved oral pill, and a global obesity adoption curve that’s still in early innings give the bull case plenty of runway.

Related: Early Eli Lilly stock investors now earn a 9% dividend yield-on-cost