Shares of Eli Lilly (LLY) plunged in trading on Tuesday after the pharmaceutical company projected lower-than-anticipated sales for its blockbuster weight-loss drug, Zepbound, and its related diabetes treatment, Mounjaro. However, the company offered a brighter outlook for 2025, forecasting revenues above Wall Street’s consensus estimates.
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LLY Issues Guidance for Q4
In the fourth quarter, LLY expects worldwide revenue to reach approximately $13.5 billion, around $400 million below the lower end of its previously issued financial guidance. This guidance includes $3.5 billion in revenues for Mounjaro and $1.9 billion for Zepbound. For reference, analysts were expecting sales of $5.35 billion for Mounjaro and $2.08 billion for Zepbound. Additionally, LLY’s Q4 sales outlook is below consensus estimates of $13.96 billion.
However, the pharmaceutical giant remained optimistic about its longer-term prospects. The company anticipates that its FY25 revenue will range from $58 billion to $61 billion, surpassing the consensus estimate of $58.52 billion. This better-than-expected forecast is driven by LLY’s expanding pharmaceutical portfolio and innovative therapies.
Why Has LLY Pulled Back on its Guidance?
David A. Ricks, Lilly chair and CEO commented on the lower-than-expected Q4 guidance, “While the U.S. incretin market grew 45% compared to the same quarter last year, our previous guidance had anticipated even faster acceleration of growth for the quarter. That, in addition to lower-than-expected channel inventory at year-end, contributed to our Q4 results.”
The fourth-quarter sales dip comes as the company grapples with unprecedented demand for its weight-loss and diabetes treatments. Yet, Lilly’s ambitious FY25 guidance reflects its intention to capitalize on this demand, amid temporary obstacles.
Is Eli Lilly a Buy, Sell, or Hold?
Analysts remain bullish about LLY stock, with a Strong Buy consensus rating based on 15 Buys and two Holds. Over the past year, LLY has increased by more than 10%, and the average LLY price target of $1,057 implies an upside potential of 42.4% from current levels.
