Eli Lilly stock slips as raised forecast meets valuation test

Eli Lilly raised its 2026 revenue outlook after reporting strong demand for its diabetes and obesity medicines. The company now expects full-year revenue of 91 billion to 92 billion US dollars, up from the 86.0 billion US dollars forecast on August 5. Trefis, in an analysis published by Yahoo Finance on Monday, November 2, said the midpoint of the new range is 6.4 percent above the previous estimate.

Eli Lilly and Co. stock traded at 1,255.40 euros on Lang & Schwarz at 11:15 CET on Monday, November 2, 1.57 percent below the Xetra close of Friday, October 30. The Xetra comparison uses the previous completed session because the German market was still open.

Revenue growth meets earnings pressure

Management attributed the stronger sales outlook to broad portfolio momentum, including Mounjaro's performance outside the United States and rapid uptake of a Medicare GLP-1 bridge program in the US. Mounjaro and Zepbound together generated more than 16 billion US dollars of third-quarter revenue, 6 billion US dollars more than a year earlier.

The earnings outlook moved in the opposite direction. Lilly now expects adjusted 2026 earnings of 35 to 36 US dollars per share, compared with the previous forecast of 36.00 US dollars. Trefis reported that management said the midpoint would have risen by 4.07 US dollars per share without 4.57 US dollars per share of third-quarter charges linked to acquired research projects. The lower guidance therefore reflects deal costs rather than weaker demand.

The new revenue range also raises the execution bar for the December quarter. Revenue for the first nine months reached 67.2 billion US dollars, 46.4 percent above the year-earlier period. Reaching the midpoint of the full-year outlook would require 24.3 billion US dollars in fourth-quarter revenue, 26.1 percent more than in the prior-year quarter.

Obesity portfolio remains central

Foundayo, Lilly's oral obesity medicine, is becoming an additional growth driver. New patient starts doubled in the third quarter from the second quarter, and management said about four in ten US patients beginning an oral obesity medicine now choose Foundayo.

Pricing remains a counterweight to volume growth. Excluding a favorable rebate adjustment, US prices fell 10 percent in the quarter. Trefis also noted that Lilly's reported earnings multiple stood at 45.8, compared with 22.6 for the S&P 500, leaving the stock sensitive to any disappointment in sales, margins or the next product launches.

The stock gained 10.0 percent across October 29 and 30, while the S&P 500 declined 2.1 percent over the same two sessions. The analysis cautioned that the release combined third-quarter results with the guidance increase, so the move cannot be attributed to the forecast alone. Lilly is expected to provide its 2027 guidance during its fourth-quarter call in January.

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