Eli Lilly's stock tumbles 15% in 2026 despite retatrutide's promising trial results

Eli Lilly's stock has struggled in early 2026, dropping around 15% since January. The decline comes despite promising clinical results for its experimental weight-loss drug, retatrutide. Analysts now watch closely as key regulatory and trial milestones approach. On March 17, HSBC downgraded Lilly's stock to 'Reduce' and cut its price target from $1,070 to $850. The bank remains the only firm with a 'sell' rating among over 30 analysts, who otherwise set a consensus target near $1,221.

Two days later, Lilly released the first Phase 3 data for retatrutide in type 2 diabetes patients. The TRANSCEND-T2D-1 study showed an average weight loss of 16.8% and HbA1c reductions of 1.7 to 2.0 percentage points over 40 weeks. However, the drug's blood sugar benefits lagged slightly behind Lilly's own Mounjaro (tirzepatide). Market reaction was muted, overshadowed by pricing competition and Novo Nordisk's higher-dose Wegovy approval.

Seven more Phase 3 trials for retatrutide—covering obesity, sleep apnoea, and heart health—are due later this year. Full results will be presented in June at the American Diabetes Association's conference. Meanwhile, the FDA will decide on Lilly's oral GLP-1 candidate, orforglipron, by April 10.

Analyst Rajesh Kumar projects the weight-loss drug market could reach $80 to $120 billion by 2032. But he warns that growing price pressure may squeeze profit margins. Lilly's stock performance has trailed the S&P 500 in 2026, despite retatrutide's strong clinical data. The company now faces critical regulatory and trial outcomes in the coming months. Investors will weigh these results against intensifying competition in the weight-loss drug sector.