Pharmaceutical behemoth Eli Lilly (LLY) smashed Wall Street’s third-quarter expectations and raised its full-year outlook Thursday, thanks to its diabetes and obesity treatments.
“Arguably the strongest print across 3Q so far,” Cantor analyst Carter Gould said in a report.
Type 2 diabetes treatment Mounjaro brought in $6.52 billion in sales, more than doubling vs. the year-earlier period. Mounjaro sales topped already bullish projections by more than $1 billion. Sales of the company’s weight-loss drug, Zepbound, catapulted 185% to $3.59 billion, handily beating the roughly $3.5 billion estimate, according to FactSet.
Lilly also raised its outlook and now projects adjusted profit of $23 to $23.70 per share and $63 billion to $63.5 billion in sales. At the midpoint, the earnings outlook is almost $1 better than the guidance issued three months ago. The sales outlook is also up $2.25 billion from Lilly’s previous view.
“We’d argue the $2.25bn top-line guidance raise was more impressive than the 3Q print, given it still leaves room for 4Q upside, beyond just reflecting 3Q largely (outside U.S.) beat,” Gould said.
After the stock market opened, Eli Lilly stock rose more than 1% to 824.61.
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Eli Lilly’s Broad-Based Beat
In total, Lilly’s adjusted earnings rocketed 495% to $7.02 per share, widely topping expectations for $5.89. Sales also ramped up 54% to $17.6 billion, easily above forecasts for $16.05 billion.
In addition to the strong Mounjaro and Zepbound sales, Lilly reported $1.47 billion from Verzenio, its third-biggest drug. Sales of Verzenio, a breast cancer treatment, rose 7%.
Edward Jones analyst John Boylan noted demand for Mounjaro and Zepbound is likely to remain strong. But macro issues could still plague Eli Lilly stock, including Medicare pricing negotiations with Novo Nordisk (NVO) over its rival diabetes drug, Ozempic.
“However, we await clarity on a competitor’s negotiations with Medicare on its GLP-1 diabetes drug and any outcome that Lilly has with the Trump administration on Most Favored Nation drug price negotiations,” he said in a note. “These will likely be an overhang on shares until we get resolutions.”
Though Pfizer (PFE) and AstraZeneca (AZN) have signed deals with the Trump administration to avoid the 100% tariff on pharmaceutical products, there’s still been no word from whether other members of the Big Pharma gang will sign on.
Gould, though, likes the setup for Eli Lilly stock. He noted the company is expected to provide an update on eloralintide at Obesity Week in early November. Lilly is developing eloralintide, which targets amylin, as another weight-loss drug.
The company is also running a study pitting its oral GLP-1 drug, orforglipron, against Novo Nordisk’s semaglutide. Semaglutide is the chemical backbone behind Ozempic and weight-loss drug Wegovy. Novo is also seeking approval for an oral version of it in obesity treatment.
A Potential Entry Into Lilly Stock
Eli Lilly stock is trading above its key moving averages, but has a low IBD Digital Relative Strength Rating of 33. This means Lilly stock outranks just the bottom third of all stocks in terms of 12-month performance.
But investors could use the short-term high of 864.35 as an entry to a long, deep consolidation.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
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