As Wall Street grows increasingly nervous about what artificial intelligence will do to jobs in media, finance, and retail, Barclays analyst Emily Field is making the case that the pharmaceutical sector is one place investors can actually feel good about right now.
In a new coverage initiation published this week, Field and her team at Barclays launched coverage of U.S. large-cap biopharma with a Neutral sector view, arguing that pharma stands apart from the industries currently being rattled by AI disruption and that defensive investors have good reason to rotate into the sector this year. Out of the group, she named Eli Lilly (LLY) and Bristol-Myers Squibb (BMY) as her two top picks, both rated Overweight.
The reasoning is straightforward: unlike the industries being disrupted by AI, pharma is actually using it to its advantage. AI is fundamentally changing how drugs are discovered and tested, compressing timelines and cutting costs in ways that benefit companies with the largest data sets and deepest pipelines. Barclays sees pharma as an AI winner, not a victim.
Why Eli Lilly is Barclays’ top pick heading into 2026
Lilly is coming off one of the strongest quarters in its history. In Q4 2025, revenue hit $19.3 billion, up 43% year over year, blowing past analyst estimates of $17.96 billion. Non-GAAP earnings per share came in at $7.54, well above the $6.67 consensus. Demand for Zepbound, its obesity drug, and Mounjaro, its diabetes treatment, powered the beat.
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The company guided 2026 revenue to between $80 billion and $83 billion, representing roughly 25% growth. Zepbound alone posted $4.2 billion in U.S. revenue in Q4, up 122% year over year, as the company held nearly 70% of new obesity prescriptions in the branded market.
Field initiated Lilly at Overweight with a $1,350 price target, implying about 28% upside from current levels around $1,052. The broader Wall Street consensus sits at a Strong Buy, with an average target of $1,248 across 19 analysts.
What is driving Eli Lilly’s growth
- Mounjaro (LLY): worldwide revenue up 110% in Q4 to $7.4 billion, now holds over 55% of new U.S. type 2 diabetes prescriptions
- Zepbound (LLY): U.S. revenue up 122% in Q4 to $4.2 billion, nearly 70% share of new branded obesity prescriptions
- Pipeline depth: 99 clinical-stage programs, including orforglipron, an oral GLP-1 pill for obesity, pending FDA approval in Q2
- 2026 revenue guidance: $80 to $83 billion, up 25% from full-year 2025 revenue of $65.2 billion
Why Bristol-Myers Squibb is Barclays’ value play for 2026
Bristol-Myers is a different kind of bet. The company faces a well-documented patent cliff: it will lose exclusivity for Eliquis in Europe this year and Opdivo in 2028, with U.S. losses following in subsequent years. That overhang has compressed the stock’s valuation for years. But Field thinks the market has punished Bristol-Myers too hard for too long.
Q4 2025 results showed the growth portfolio is doing its job. Total revenue was $12.5 billion, flat year over year but ahead of estimates. The growth portfolio, which includes newer drugs like Camzyos, Breyanzi, and Reblozyl, jumped 16% to $7.4 billion in Q4, representing nearly 60% of total revenue. Non-GAAP EPS of $1.26 beat estimates by about 5%.
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Field sees the timing as favorable for Bristol-Myers, with Eliquis IRA pricing getting locked in and the pipeline set to deliver multiple data points through the year. She initiated at Overweight with a $75 target, representing 24% upside from current levels near $60.
What is driving the Bristol-Myers turnaround thesis
- Growth portfolio: up 16% in Q4 and 17% for full-year 2025, now nearly 60% of total revenue
- Camzyos: revenue up 59% year over year in Q4
- Breyanzi: revenue up 49% year over year in Q4, now approved across five cancer types
- Balance sheet: $11 billion in cash, completed a $10 billion debt paydown ahead of schedule
- Pipeline: six potential new product registrational readouts expected in 2026, including milvexian and admilparant
The bigger picture: why pharma looks attractive right now
Field’s broader argument is that pharma’s regulatory moat protects it from the kind of AI disruption rattling other sectors. AI is not replacing drug development; it is accelerating it, compressing timelines and cutting costs in ways that benefit companies with the largest data sets and the deepest pipelines.
Aging demographics and the continued rise of chronic diseases like obesity, diabetes, and cancer provide a durable demand tailwind that is difficult to disrupt. The U.S. remains the world’s largest biopharma market, and healthcare spending has historically held up even in economic slowdowns.
Investors looking for a place to hide from macro uncertainty while still owning companies with genuine growth catalysts have a clear argument for both of these names. Lilly is the high-conviction leader with premium growth priced in. Bristol-Myers is the value play banking on a pipeline-driven rerating. Barclays thinks both roads lead to outperformance in 2026.
Related: Eli Lilly acquires Orna Therapeutics for $2.4B to disrupt CAR-T market
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