Eli Lilly & Co. (NYSE: LLY), a global leader in pharmaceuticals, faced a challenging trading day after revising its fourth-quarter guidance downward. The company reported slower-than-expected sales for its blockbuster weight-loss drugs, Mounjaro and Zepbound, prompting a sharp dip in its stock price, which fell over 7% to close at $741.22 on Tuesday.
Fourth-Quarter Revenue Misses Estimates
Eli Lilly now anticipates revenue of approximately $13.5 billion for the December quarter, falling short of the consensus estimate of $13.93 billion. The key contributors to the shortfall were Mounjaro, which generated $3.5 billion in sales versus estimates of $4.4 billion, and Zepbound, which brought in $1.9 billion, missing expectations of $2.14 billion.
Despite the setback, Eli Lilly projects 2025 revenue in the range of $58 billion to $61 billion, exceeding Wall Street’s midpoint consensus of $58.5 billion. Analysts suggest this signals optimism about the company’s longer-term growth potential.
Market Reaction and Analyst Insight
The disappointing performance triggered a sharp sell-off in Eli Lilly’s stock, with investors concerned about the near-term impact of the revenue miss. However, analysts like Srikripa Devarakonda of Truist Securities view the company’s 2025 guidance as a strong positive, noting an implied 32% year-over-year growth rate. This outlook suggests that while challenges persist, the company remains on a robust growth trajectory.
Weight-Loss Drug Competition Intensifies
The weight-loss drug market has become increasingly competitive, with companies racing to meet growing global demand. Both Mounjaro and Zepbound are central to Eli Lilly’s strategy to capture market share in this booming segment. However, their slower-than-expected sales in the last quarter underline the challenges of maintaining leadership in a rapidly evolving space.
Eli Lilly’s Broader Strategic Moves
In addition to its weight-loss drugs, Eli Lilly recently announced plans to acquire a cancer drug from Scorpion Therapeutics for $2.5 billion, signaling its commitment to expanding its pipeline beyond obesity and diabetes treatments. This acquisition highlights the company’s diversified strategy to sustain growth across multiple therapeutic areas.
Stock Technical Ratings
Eli Lilly stock performance has shown some weakness, with a Relative Strength Rating (RSR) of 41 and a Composite Rating of 82, indicating room for improvement in both technical and fundamental metrics. The company’s shares previously saw strong momentum, but recent misses could weigh on near-term performance.
Looking Ahead
Eli Lilly is scheduled to release its full fourth-quarter and 2024 financial results on February 6. Investors and analysts will closely monitor the report for further clarity on the company’s financial health and the long-term potential of its weight-loss drugs. While the current setback may pose challenges, the company’s robust 2025 revenue guidance suggests a promising future.
