Why Eli Lilly Stock Just Jumped 8%

Core Viewpoint - Eli Lilly reported a significant earnings beat, with a stock price increase of 8.3% following the announcement of Q2 results, raising questions about the sustainability of its high P/E ratio of 54.5 [1][3]. Financial Performance - Eli Lilly's Q2 earnings per share were reported at $3.92, significantly higher than the expected $2.60, with total sales reaching $11.3 billion compared to the forecast of $9.9 billion [1][2]. - The company experienced a 36% growth in quarterly sales and a 68% increase in profits year-over-year [2]. Key Products Driving Growth - The growth was primarily driven by the success of its GLP-1 drugs, Mounjaro and Zepbound, with Mounjaro sales tripling to $3.1 billion, accounting for over 27% of total sales, while Zepbound generated $1.2 billion in sales, representing more than 10% of total sales [2]. - Verzenio, a cancer drug, also contributed to growth with a 44% increase in sales [2]. Future Outlook - Management has raised its full-year sales forecast to approximately $46 billion, largely due to the strong performance of Mounjaro and Zepbound, with an expected earnings per share of $15.35 [3]. - Analysts predict that while current growth rates are high, they may decline to about 35% annually in the long term, raising concerns about the sustainability of the stock's high valuation [3].