Key Takeaways
- Beginning October 1, CVS Caremark will add Lilly’s Zepbound to its coverage, while the oral medication Foundayo gains approval effective June 1, overturning last year’s exclusion policy.
- With this decision, the nation’s three dominant pharmacy benefit managers — Express Scripts, Optum Rx, and Caremark — all now provide coverage for Lilly’s complete obesity treatment lineup.
- Last year’s partnership between CVS and Novo Nordisk elevated Wegovy to preferred status, resulting in an approximately 12% decline for LLY stock.
- During Q1 2026, Lilly reported revenue of $19.8 billion, representing a 56% year-over-year increase, alongside adjusted earnings per share of $8.55, marking a 156% surge.
- Following the May 28 announcement, LLY shares advanced roughly 4%, positioning the stock within 5% of its record peak.
On May 28, Eli Lilly celebrated a significant victory when CVS Caremark announced it would overturn its previous stance on Zepbound coverage. Beginning this October, Caremark plans to include Zepbound in its formulary, while coverage for the company’s oral GLP-1 medication, Foundayo, commences June 1.
A little more than twelve months prior, CVS had taken the completely opposite approach. The company established an arrangement with Novo Nordisk that positioned Wegovy as the preferred GLP-1 medication while removing Zepbound from coverage entirely. This strategic move, coupled with underwhelming quarterly results from Lilly during that period, triggered an almost 12% drop in LLY stock value.
The tide has now turned. According to a CVS representative, workers whose health plans include GLP-1 medications for obesity treatment will gain equivalent access to offerings from both Novo and Lilly at identical co-payment rates.
Shares of LLY rose by approximately 4% following the coverage announcement.
Complete Coverage Across Top Three PBMs
Caremark’s policy change means the three largest pharmacy benefit managers operating in the United States — Express Scripts (under Cigna), Optum Rx (managed by UnitedHealth), and CVS Caremark — all now provide comprehensive coverage for Lilly’s complete obesity medication portfolio.
This development carries substantial weight. PBM formulary decisions directly influence medication accessibility and establish the financial burden patients face at the pharmacy counter. Broader insurance coverage generally drives increased prescription demand.
The announcement’s timing proves particularly advantageous for Foundayo. Lilly’s pill-based GLP-1 alternative only recently entered the market after securing FDA clearance in April. Novo’s oral medication alternative had already secured Caremark formulary placement several months earlier. Achieving coverage parity eliminates a competitive handicap that had been limiting Foundayo’s market penetration.
Approximately 80% of individuals prescribed Foundayo represent new GLP-1 users, indicating the tablet formulation appeals to a distinct patient demographic compared to injection-based alternatives.
This coverage expansion also strengthens Lilly’s competitive position against telemedicine providers distributing lower-cost compounded Zepbound alternatives. Enhanced insurance accessibility improves the branded medication’s price competitiveness.
Market Valuation and Analyst Perspectives
Currently, LLY stock commands a forward earnings multiple of approximately 29x. This represents a premium relative to the S&P 500’s forward P/E of roughly 21x and the healthcare sector’s typical 17x multiple. However, it remains significantly below Lilly’s three-year historical average forward P/E of about 43x.
Before the company released its Q1 2026 financial results, LLY shares had declined nearly 21% year-to-date. The earnings announcement — showcasing 56% revenue growth reaching $19.8 billion and adjusted EPS of $8.55, representing a 156% annual increase — sparked a substantial recovery. The stock now trades just under 5% beneath its historical peak, though still lagging the S&P 500’s year-to-date advance exceeding 10%.
Wall Street analysts maintain a consensus price objective for LLY around $1,227, suggesting approximately 15% appreciation potential from present trading levels. Price targets revised following the first-quarter results average marginally higher at $1,239.
Barclays maintains the most optimistic outlook with a $1,400 target. Rothschild & Co Redburn expresses the greatest caution at $900.
The forward earnings multiple has also compressed from 32x when shares last traded near current valuations in February, indicating that profit projections have begun aligning more closely with the stock’s price trajectory.
