HSBC Downgrades Eli Lilly, Citing Concerns Over Obesity Drug Market

The bank believes Wall Street is overestimating the size of the obesity drug market and that pricing pressure will be a real headwind for the pharmaceutical giant.

Mar. 18, 2026 at 12:07am

Got story updates? Submit your updates here. ›

HSBC has downgraded Eli Lilly (LLY) stock, slashing its price target from $1,070 to $850. The firm believes Wall Street is overestimating the size of the obesity drug market and that pricing pressure will be a real headwind for the company in 2026, despite Lilly's strong revenue guidance. The downgrade comes as Lilly prepares to launch its oral obesity pill, orforglipron, which faces competition from Novo Nordisk's Wegovy.

Why it matters

Eli Lilly has been one of the most talked-about stocks on Wall Street in recent years, thanks to the success of its obesity and diabetes franchise. The company's stock has returned over 1,500% in the past decade, making it a darling for investors. However, HSBC's downgrade raises concerns about the sustainability of Lilly's growth and the potential challenges it may face in the obesity drug market.

The details

HSBC believes Wall Street's assumption that the obesity drug market will eventually surpass $150 billion is too optimistic. The bank's own estimate puts the total addressable market somewhere between $80 billion and $120 billion by 2032. HSBC also pointed to pricing pressure as a serious issue, suggesting that much of Lilly's recent sales momentum has been driven more by pricing dynamics than true product differentiation.

  • Eli Lilly's oral obesity pill, orforglipron, is awaiting FDA approval, expected as early as April 2026.
  • Novo Nordisk's oral Wegovy pill reached 50,000 weekly prescriptions in under three weeks, giving it a head start in the market.

The players

Eli Lilly

A pharmaceutical company that has been in business since 1876 and is known for its diabetes and obesity drug franchise, including the active ingredient in Zepbound and Mounjaro.

HSBC

A global banking and financial services company that has downgraded Eli Lilly stock, citing concerns over the size of the obesity drug market and pricing pressure.

Lucas Montarce

The Chief Financial Officer of Eli Lilly, who pushed back on HSBC's skepticism about the company's oral obesity pill, orforglipron.

Novo Nordisk

A pharmaceutical company that has already launched its oral obesity pill, Wegovy, which has seen strong early adoption.

Got photos? Submit your photos here. ›

What they’re saying

“Simplicity and convenience is very important.”

— Lucas Montarce, Eli Lilly CFO (CNBC)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This downgrade from HSBC highlights the challenges Eli Lilly may face in the obesity drug market, despite its strong revenue guidance and pipeline. Investors will be closely watching the launch and performance of Lilly's oral obesity pill, orforglipron, as it competes with Novo Nordisk's established Wegovy product.