Lilly Down More Than 15% in a Year: Time to Buy, Sell or Hold?

Core Viewpoint - Eli Lilly and Company's stock has declined 15.7% over the past year due to a first-quarter earnings miss, guidance cut, and positive developments at rival Novo Nordisk, alongside broader economic challenges [1][10]. Group 1: Company Performance - Lilly's cardiometabolic division is its strongest segment, driven by the success of GLP-1 therapies Mounjaro and Zepbound, which together account for approximately 48% of total revenues [3][4]. - Despite slower-than-expected sales in the second half of 2024, Mounjaro and Zepbound saw a resurgence in the first quarter of 2025 due to new international market launches and improved supply [5][6]. - Lilly anticipates continued growth for Mounjaro and Zepbound through expanded international uptake and deeper market penetration in the U.S. [6][7]. Group 2: Product Pipeline and Future Growth - Lilly has secured approvals for several new therapies, including Omvoh, Jaypirca, Ebglyss, and Kisunla, which are expected to contribute to revenue growth in 2025 [10][11]. - The company is also advancing its pipeline in obesity, diabetes, and cancer, with several key mid and late-stage data readouts expected this year [12]. - Lilly is diversifying beyond GLP-1 drugs by expanding into cardiovascular, oncology, and neuroscience areas, including recent M&A deals to enhance its pipeline [13]. Group 3: Competitive Landscape - The obesity market is projected to reach $100 billion by 2030, with Lilly and Novo Nordisk currently dominating the space [14]. - Mounjaro and Zepbound face competition from Novo Nordisk's semaglutide products and emerging candidates from companies like Amgen and Viking Therapeutics [15][17]. - Other pharmaceutical companies are also entering the obesity market, which could challenge Lilly's and Novo Nordisk's market positions [18]. Group 4: Financial Outlook - Lilly expects 2025 revenues to be between $58 billion and $61 billion, indicating a year-over-year growth of approximately 32% [30]. - The company's stock has increased by over 400% in the past five years, primarily due to successful drug launches and a strong pipeline [29]. - Despite a high valuation with a price/earnings ratio of 29.54 compared to the industry average of 15.04, Lilly's stock is trading below its five-year mean [23].