Lilly Up 18% in a Month: Should You Buy, Sell or Hold the Stock?

Core Insights - Eli Lilly and Company's stock has increased by 18% in a month, primarily due to strong third-quarter performance and price-cut agreements for GLP-1 therapies with the Trump administration [1][30] Financial Performance - Lilly reported solid third-quarter results, surpassing estimates for both earnings and sales, with key drugs Mounjaro, Zepbound, and Jardiance performing well [2] - The company raised its revenue expectations for 2025 from $60 billion to a range of $62 billion to $63.5 billion, and EPS expectations from $21.75-$23.00 to $23.00-$23.70 [3] Product Performance - Mounjaro and Zepbound have become significant revenue drivers, accounting for over 50% of total revenues, with Mounjaro sales at $6.52 billion (up 109% YoY) and Zepbound at $3.59 billion (up 185% YoY) in Q3 [5][6] - The cardiometabolic division is the strongest segment for Lilly, driven by the success of GLP-1 therapies [4] Pipeline and Future Growth - Lilly is expanding its obesity pipeline with several new molecules in clinical development, including orforglipron and retatrutide, which are expected to enhance sales further [8][10] - The company has also secured approvals for new therapies, contributing to revenue growth, including Omvoh and Kisunla [14][15] Market Competition - The obesity market is projected to reach $100 billion by 2030, leading to increased competition, particularly from Novo Nordisk and emerging candidates from other companies [16][18] - Lilly faces competition from other firms developing oral GLP-1-based treatments, which could impact its market share [17][19] Stock Performance and Valuation - Lilly's stock has outperformed the industry, rising 25.2% this year compared to the industry's 6.3% increase [20] - The stock is currently trading at a price/earnings ratio of 31.62, significantly higher than the industry average of 15.57, but below its 5-year mean of 34.54 [23] Analyst Sentiment - The Zacks Consensus Estimate for 2025 EPS has increased from $23.10 to $23.60, indicating a positive outlook from analysts [26] - Despite challenges, Lilly's strong product portfolio and growth prospects make it a favorable investment option [29]