Why Eli Lilly Stock Soared Today
Key Points
Sales of Lilly's GLP-1 drugs are surging.
Management issued a bullish profit forecast.
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Shares of Eli Lilly (NYSE: LLY) climbed over 10% on Wednesday after the medicine maker delivered a blockbuster earnings report.
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Sales of Eli Lilly's GLP-1 medicines are booming
Lilly's fourth-quarter revenue rose 43% year over year to $19.3 billion. The gains were driven by the biotech's diabetes and obesity treatments, Mounjaro and Zepbound, which saw sales surge by 110% and 123%, respectively, to $7.4 billion and $4.3 billion.
Lilly has been rushing to expand its manufacturing network to keep up with soaring demand for its popular GLP-1 medications. That challenge intensified after the drugmaker reached a deal with the U.S. government in November that's likely to further increase demand for Mounjaro and Zepbound, by making them available at reduced cost to Medicare beneficiaries.
Moreover, Lilly's market share is rising in the rapidly growing obesity drug market after a clinical trial showed that Zepbound resulted in greater weight loss than Novo Nordisk's Wegovy.
"Zepbound continues to be the market leader in the branded obesity market with nearly 70% share of new prescriptions," chief financial officer Lucas Montarce said during a conference call with analysts.
All told, Lilly's adjusted net income jumped 41% to $6.8 billion, or $7.54 per share. That easily surpassed Wall Street's estimates, which had called for per-share profits of $6.91.
Eli Lilly issued a strong growth forecast
Looking ahead, management expects full-year revenue to grow by roughly 25% to between $80 billion and $83 billion in 2026, with adjusted earnings per share increasing by about 40% to $33.50 to $35.00.
"This past year was busy and productive, and we expect more of the same in 2026 as we continue to create meaningful medicines on behalf of the patients that need us," chief scientific officer Daniel Skovronsky said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
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