Eli Lilly Rises 7.5% YTD: Time to Buy, Sell or Hold the Stock?

Core Viewpoint - Eli Lilly's shares fell nearly 5% following disappointing data from Novo Nordisk's obesity drug CagriSema, which showed a weight loss of 15.7% after 68 weeks, below investor expectations [1][2] Company Performance - Despite the recent decline, Eli Lilly's stock has increased by 7.5% year-to-date and has risen 492.6% over the past five years, primarily due to successful drug launches like Mounjaro and Zepbound [3][25] - In 2024, Mounjaro and Zepbound generated combined sales of $16.5 billion, accounting for approximately 36% of the company's total revenues [6] - The company expects revenues in 2025 to range from $58.0 billion to $61.0 billion, indicating a year-over-year growth of 32% [26] Sales Dynamics - Sales growth for Mounjaro and Zepbound faced challenges in the second half of 2024 due to supply and channel dynamics, raising concerns about demand [7] - Lilly is optimistic about sales recovery in 2025 as it expands manufacturing capacity and launches Mounjaro in new international markets [8][9] Product Pipeline and Approvals - Lilly has gained approvals for several new drugs, including Omvoh, Jaypirca, Ebglyss, and Kisunla, contributing significantly to top-line growth in 2024 [12] - The company is also advancing its pipeline in obesity, diabetes, and Alzheimer's, with several mid to late-stage readouts expected in 2025 [13] Competitive Landscape - The obesity market is projected to grow to $100 billion by 2030, with Lilly and Novo Nordisk currently dominating the space [14] - Competition is intensifying with other companies like Amgen and Viking Therapeutics developing GLP-1-based candidates that could challenge Lilly's offerings [16] Financial Strategy - In 2024, Lilly returned $3 billion to shareholders through share repurchases and dividends, and announced a new $15 billion stock buyback plan along with a 15% increase in its quarterly dividend [28]