Eli Lilly (LLY) Stock Jumps 4% As CVS Health Does a Complete 180 on Zepbound

TLDR

• CVS Caremark will cover Lilly’s Zepbound starting Oct. 1 and its new oral GLP-1 pill Foundayo from June 1, reversing a year-old decision that had excluded Zepbound.
• The move means all three of the largest U.S. PBMs — Express Scripts, Optum Rx, and Caremark — now cover Lilly’s full obesity drug portfolio.
• CVS had previously sided with Novo Nordisk, making Wegovy its preferred GLP-1 and knocking LLY stock down nearly 12%.
• Lilly’s Q1 2026 revenue jumped 56% year-over-year to $19.8 billion, with adjusted EPS of $8.55, up 156%.
• LLY gained about 4% on the day of the announcement; the stock now trades less than 5% below its all-time high.

Eli Lilly scored a major win on May 28 when CVS Caremark reversed its decision to exclude Zepbound from coverage. Starting October 1, Caremark will cover Zepbound. Its new oral GLP-1, Foundayo, gets coverage from June 1.

Eli Lilly and Company, LLY

Just over a year ago, CVS had moved in the opposite direction. It struck a deal with Novo Nordisk that made Wegovy its preferred GLP-1 treatment and cut Zepbound from its formulary. That decision, combined with a disappointing earnings report from Lilly at the time, sent LLY stock down nearly 12%.

Now CVS is walking that back. A CVS spokesperson confirmed that employees whose employers cover GLP-1s for obesity will now have equal access to both Novo and Lilly products at the same co-pay.

LLY stock gained approximately 4% on the day of the announcement.

All Three Major PBMs Now on Board

With Caremark’s reversal, all three of the largest pharmacy benefit managers in the U.S. — Express Scripts (Cigna), Optum Rx (UnitedHealth), and now CVS Caremark — cover Lilly’s full approved obesity drug portfolio.

That’s no small thing. PBM coverage directly affects patient access and determines how much out-of-pocket patients pay. Wider coverage typically translates to higher prescription volumes.

The timing also matters for Foundayo. Lilly’s oral GLP-1 pill is newer to market, having received FDA approval only in April. Novo’s competing oral pill had already earned Caremark coverage months earlier. Being on equal footing now removes a structural disadvantage that was slowing Foundayo’s rollout.

Roughly 80% of Foundayo’s patients had not previously taken GLP-1 medications, suggesting the pill format is reaching a different patient pool than the injectable versions.

The move also helps Lilly push back against telehealth companies that have been offering cheaper compounded versions of Zepbound. Easier access through insurance makes the branded product more competitive on price.

Valuation and Wall Street Outlook

LLY stock currently trades at around 29x forward earnings. That looks steep compared to the S&P 500’s roughly 21x and the broader healthcare sector’s 17x. But it’s well below Lilly’s own three-year average forward P/E of approximately 43x.

Prior to the company’s Q1 2026 earnings report, LLY was down nearly 21% on the year. After the report — which showed a 56% revenue jump to $19.8 billion and adjusted EPS of $8.55, up 156% year over year — the stock recovered sharply. It now sits less than 5% below its all-time high, still trailing the S&P 500’s year-to-date gain of over 10%.

The Wall Street consensus price target on LLY sits near $1,227, implying around 15% upside from current levels. Targets updated after the Q1 report average slightly higher at $1,239.

Barclays holds the most bullish target at $1,400. Rothschild & Co Redburn is the most cautious at $900.

The forward P/E has also come down from 32x when the stock last traded near current prices in February, suggesting earnings estimates have caught up somewhat with the share price.

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