Eli Lilly vs. Novo Nordisk: Which Is the Best Stock to Buy Today?
Both companies are benefiting from the obesity drug theme, but one stock looks much more attractive than the other.
On the Jan. 5, 2026, episode of The Morning Filter podcast, Morningstar Chief US Market Strategist Dave Sekera commented on what the Food and Drug Administration’s approval of Novo Nordisk’s NVO obesity drug pill may mean for the company. He also discussed whether Novo or its main competitor, Eli Lilly LLY, is the better stock to buy today for those who’d like to invest in the obesity drug theme.
Here’s an excerpt from the episode.
Susan Dziubinski: Novo Nordisk, which is ticker NVO, received FDA approval for its Wegovy pill as an obesity treatment. What’s Morningstar make of that news? Any changes to the fair value estimate on Novo?
David Sekera: In my mind, I think this is really, very good news for Novo. I mean, this is the first oral version of the GLP-1 drug. I think you have a lot of people who will want to take advantage of that, as opposed to having to do the injections. Overall, we do think that the company will get a brief commercial advantage. We do expect the oral version of Lilly’s drug to launch by the spring. But at least you have a couple of months of being able to capture that shift in market share and maybe bringing new consumers online as well. Our analysts also noted that, based on the studies that were published, it appears that maybe Novo’s oral drug is slightly more effective than Eli Lilly’s drug. And may potentially also have a better safety profile. But having said all that, we did maintain our fair value on both of those stocks.
Dziubinski: Then, Dave, for an investor who might want to play that obesity drug thing theme, is Novo a better opportunity than Eli Lilly right now?
Sekera: Definitely. According to our valuations, Novo is rated 4 stars, trades at a 21% discount to fair value. And that’s after the stock popped about 9% after that announcement. Whereas Eli Lilly is trading at a 40% premium to fair value. That’s a 2-star-rated stock. This actually looks like a really good swap opportunity to me. If you’re involved in Eli Lilly, it might be worthwhile taking some profits there and reinvesting that into Novo instead.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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