We're raising our Eli Lilly price target — what a difference a quarter makes

Eli Lilly reported a robust third quarter, with revenue soaring 54% to $17.6 billion and adjusted EPS increasing 494% to $7.02, both significantly exceeding analyst expectations. This strong performance was primarily driven by exceptional sales of its GLP-1 medications, Mounjaro and Zepbound, particularly from international markets, and despite competitive pressures in the U.S. The company subsequently raised its full-year revenue outlook to $63 billion-$63.5 billion and adjusted EPS guidance, signaling continued confidence in its GLP-1 franchise and upcoming oral GLP-1 (orforglipron) launch, which further boosted investor sentiment and share price.

Analysis

Eli Lilly (LLY) reported an exceptionally strong third quarter, with revenue surging 54% year-over-year to $17.6 billion, significantly surpassing the $16.01 billion consensus. Adjusted earnings per share also saw a remarkable 494% increase year-over-year to $7.02, well above the $5.69 consensus, primarily driven by robust sales of its GLP-1 medications, Mounjaro and Zepbound, which collectively beat estimates by $1.16 billion. This performance led to a ~4% stock jump after the print.

Following this strong performance, the company raised its full-year revenue outlook to $63-$63.5 billion and adjusted EPS guidance to $23.00-$23.70, both midpoints surpassing consensus estimates, signaling strong forward momentum. Notably, Lilly increased its U.S. incretin analogue market share to 57.9%, up one percentage point quarter-over-quarter, despite competitive pressures from Novo Nordisk's Wegovy. International markets, particularly China, India, and Brazil, were key drivers of the quarterly upside.

Management expressed high confidence in its oral GLP-1 medication, orforglipron, anticipating a U.S. obesity launch next year and a Type 2 diabetes submission in H1 2026, with "billions of doses" already manufactured. This, alongside potential expanded indications for Mounjaro and Zepbound, underpins the reiterated "buy-equivalent" rating and raised price target of $925 from $800 by analysts, further supported by prior insider buying activity.

Key Decisions for Investors

• Maintain exposure to Eli Lilly (LLY) given the robust performance of its GLP-1 franchise and the upward revision of full-year guidance, indicating strong operational momentum.
• Closely monitor the commercialization trajectory of the oral GLP-1 candidate, orforglipron, as its anticipated launch next year presents a significant growth catalyst and market expansion opportunity.
• Assess the company's continued market share gains in the competitive GLP-1 space and potential pipeline expansions for Mounjaro and Zepbound into new indications, which could further diversify revenue streams.