Eli Lilly (LLY) has experienced a notable 15.6% decline year-to-date, significantly impacting the healthcare sector as it remains the most valuable U.S. healthcare company. The pressure on Lilly stems from its heavy reliance on GLP-1 drugs, particularly Mounjaro and Zepbound, which accounted for 56% of total revenue in 2025. This concentrated growth model exposes the company to potential pricing pressures and competition, raising concerns about its lofty P/E ratio of 40.1.
Given the volatility surrounding Lilly’s stock, investors may want to consider the Vanguard Healthcare ETF (VHT), which offers diversified exposure to the healthcare sector while maintaining a 12.6% weighting in Lilly. The ETF presents a more balanced investment approach with a P/E of 25.3 and a yield of 1.6%, making it a potentially safer option for those looking to capitalize on the growth in weight-loss drugs without the risks tied to a single company.
For investors, the takeaway is clear: while Eli Lilly could still deliver substantial returns for growth-focused portfolios, the Vanguard Healthcare ETF provides a more stable alternative for those seeking to mitigate risk in the current market environment.
Source: fool.com