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Key Takeaways:
- Eli Lilly reported Q1 revenue of $12.73 billion, up 45% year-over-year, driven by the success of its incretin drugs.
- Orforglipron Phase III data shows promise as the first oral GLP-1 with injectable-like efficacy and safety profile.
- Mounjaro and Zepbound continue robust growth trajectory with strong market share gains.
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Eli Lilly (LLY) delivered exceptional first-quarter results, underscoring the pharmaceutical giant’s dominance in the rapidly expanding incretin market.
Its groundbreaking oral GLP-1 candidate, orforglipron, showed promising Phase III data, potentially revolutionizing the accessibility of diabetes and obesity treatment worldwide.
LLY stock has showcased remarkable performance over the past decade, delivering an 805% return with a 24.9% compound annual growth rate.
The company’s diversified pipeline and market leadership in incretin therapies position it advantageously in the evolving healthcare landscape.
Let’s examine whether Eli Lilly represents a compelling investment opportunity at current levels.
1. LLY Stock to Benefit From Market Dominance
Eli Lilly’s key growth driver remains its incretin franchise, led by Mounjaro and Zepbound. Mounjaro generated $3.84 billion in Q1 revenue, growing 113% year-over-year, while Zepbound contributed $2.31 billion, more than quadrupling from the prior year period.
“We’re very excited to present the first Phase III clinical data from our oral GLP-1 orforglipron,” stated CEO Dave Ricks during the earnings call.
The ACHIEVE-1 trial showcased orforglipron’s potential to deliver injectable GLP-1-like efficacy with the convenience of a once-daily oral medication.
The orforglipron data showed 1.3% to 1.6% reduction in hemoglobin A1c, with over 65% of patients achieving A1c levels below 6.5%.
Weight loss reached approximately 7.9% at the highest dose, matching the performance of existing injectable GLP-1s. Most importantly, the safety profile showed no hepatic safety issues, with only 4% to 8% of patients discontinuing due to adverse events.
Beyond orforglipron, Lilly’s pipeline includes retatrutide, a triple-agonist targeting GLP-1, GIP, and glucagon receptors. The healthcare giant expects regulatory submissions for orforglipron in obesity to begin by Q4, followed by type 2 diabetes submissions in the first half of 2026.
Check out Eli Lilly’s full analyst estimates and growth forecast (It’s free) >>>
2. A Focus on Global Expansion
Eli Lilly’s international expansion strategy continues gaining momentum. Mounjaro has launched in over 40 countries, with recent entries into major markets including China, India, and Mexico.
Its focus on reimbursement for type 2 diabetes and the development of obesity treatment ecosystems internationally provides a substantial growth runway.
“When you think about the total globe, by the end of the decade, you can envision 1.5 billion or so individuals living with overweight and obesity,” noted Ken Custer, President of Cardiometabolic Health, highlighting the massive addressable market opportunity.
The international opportunity extends beyond current markets. With over 85% of global patients still untreated and a preference for oral medications in markets like Japan, orforglipron could unlock previously inaccessible patient populations.
Manufacturing advantages include no cold-chain storage requirements and separate production facilities from injectable incretins.
3. A Strong Balance Sheet
Eli Lilly enters this growth phase with robust financial metrics. It reported 45% revenue growth in Q1, with gross margins expanding to 83.5%.
The performance margin, defined as gross margin less R&D and SG&A expenses, increased by over 11 percentage points to 42.6% year-over-year.
Beyond incretin therapies, Lilly maintains a diversified pipeline across immunology, oncology, and neuroscience. Ebglyss continues strong uptake in atopic dermatitis, while Kisunla shows steady progress in Alzheimer’s disease treatment.
The company’s acquisition of Scorpion Therapeutics’ PI3K alpha inhibitor program for $1.57 billion demonstrates a continued commitment to oncology innovation.
Capital allocation remains disciplined, with $1.3 billion distributed in dividends and $1.2 billion in share repurchases during Q1.
Eli Lilly has announced over $50 billion in U.S. manufacturing investments since 2020, including plans for four new facilities to enhance domestic production capabilities.
Management’s updated 2025 guidance reflects confidence in the underlying business trends, reaffirming revenue and performance margin expectations despite potential uncertainties related to tariffs and trade policies.
Valuation Setup for LLY Stock
Despite Eli Lilly’s exceptional performance, its valuation reflects both growth prospects and execution capabilities.
Analysts expect its normalized earnings to grow from $12.99 per share in 2024 to $36.54 per share by 2027, driven by expansion resulting from the growth of the incretin franchise and advancements in its pipeline.
LLY stock currently trades at metrics that account for its leadership position in the high-growth incretin market.
The opportunity for orforglipron alone could substantially expand the addressable patient population, particularly in international markets where oral medications face fewer acceptance barriers.
Valuation models suggest potential upside of 77.3% over the next 2.5 years, with an annualized return potential of 25.6%.
This reflects multiple growth drivers and an expanding therapeutic reach across diabetes, obesity, and adjacent indications.
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Average Analyst Price Target for LLY Stock
Wall Street maintains a bullish outlook on LLY stock, with a consensus price target of $951.98. The range of estimates spans from $650 to $1,190, reflecting varying perspectives on the incretin market’s growth trajectory and Lilly’s competitive positioning.
Of the 29 analysts covering Eli Lilly stock, 23 recommend “Buy,” four recommend “Hold,” and two recommend “Sell,” indicating confidence in the company’s strategic direction and execution capabilities.
TIKR Takeaway for Eli Lilly Stock
Eli Lilly’s first-quarter results and orforglipron breakthrough demonstrate an ability to innovate while executing on current market opportunities.
The combination of incretin market leadership, global expansion potential, and diversified pipeline development creates a compelling investment thesis for sustained value creation.
With the obesity and diabetes epidemics representing massive unmet medical needs globally, Lilly’s comprehensive approach positions it to capture disproportionate value.
For investors seeking exposure to the transformative incretin therapy market, Eli Lilly stock represents a leading pure-play opportunity.
FAQs
1. What is the target price for LLY stock?
The average LLY stock price target is $952.
2. Is Eli Lilly Stock a Buy, Sell, or Hold?
Out of the 29 analysts covering Eli Lilly stock, 23 recommend a “Buy”.
3. Does LLY stock pay shareholders a dividend?
Yes, LLY stock is forecast to pay an annual dividend of $5.90 per share in 2025.
4. What is the 3-Year Forecast for LLY stock?
Our valuation model projects LLY stock to reach $1,375 in 2028.
5. Is LLY stock overvalued?
Given consensus price targets, LLY stock trades at a 23% discount in June 2025.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
