Should You Buy, Sell or Hold Lilly Stock Ahead of Q2 Earnings?

Core Viewpoint - Eli Lilly and Company (LLY) is set to report its second-quarter earnings on August 7, with sales and earnings estimates at $14.75 billion and $5.61 per share respectively. Earnings estimates for 2025 have increased slightly from $21.92 to $22.05 per share over the past month [1][6]. Group 1: Earnings Performance - LLY has had a mixed earnings surprise history, exceeding expectations in two of the last four quarters and missing in the other two, with an average surprise of 6.69% [3]. - The last reported quarter saw a negative earnings surprise of 5.11% [3][4]. Group 2: Factors Influencing Upcoming Results - The anticipated growth in LLY's second-quarter results is expected to be driven by strong demand for its GLP-1 drugs, particularly diabetes drug Mounjaro and weight loss medicine Zepbound [6][7]. - Sales of Mounjaro and Zepbound are projected at $4.58 billion and $3.1 billion respectively, with LLY's own estimates slightly lower at $4.46 billion and $3.09 billion [9]. - Increased demand for other key drugs like Emgality, Jardiance, Olumiant, Taltz, and Verzenio is also expected to support top-line growth, despite pricing pressures and competitive dynamics [10][12]. Group 3: Competitive Landscape and Market Dynamics - LLY faces significant competition in the GLP-1 market, particularly from Novo Nordisk's semaglutide products, which could impact Mounjaro and Zepbound's market share [25][26]. - The company is diversifying its pipeline beyond GLP-1 drugs, with recent acquisitions aimed at expanding into cardiovascular, oncology, and neuroscience areas [23][24]. Group 4: Stock Performance and Valuation - LLY's stock has decreased by 0.9% year-to-date, compared to a 3.3% decline in the industry [15]. - Despite a premium valuation, the company is recommended for retention due to its robust growth prospects and position as a leading drugmaker [27].