What’s Happening With LLY Stock

Eli Lilly stock (NYSE: LLY) fell over 6% on Tuesday, January 14, after it announced that the sales of its obesity drugs are seeing slower than anticipated growth. It has adjusted its Q4 revenue forecast downward by 5% to $13.5 billion, falling $500 million short of analysts’ consensus estimate of $14 billion. Looking at the broader picture, Lilly projects full-year 2024 revenues to reach $45 billion, indicating a 32% growth over 2023 levels, but falling short of the $45.4 billion consensus estimate.

This didn’t sit well with the investors, evident from the decline in stock. But, if you want upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

We think the magnitude of the fall in LLY stock doesn’t seem justified. The company’s outlook for 2025 is solid, with top-line expected to be in the range of $58 billion and $61 billion, reflecting a growth of 32% at the midpoint, compared to expected 2024 revenue of $45 billion. This is better than the street estimates.

Eli Lilly has seen a stellar run in recent years, given the very high demand for its obesity and diabetes drugs – Zepbound and Mounjaro. Furthermore, Eli Lilly’s pipeline is expansive, with drugs under clinical trials in different therapeutic areas. In fact, the company may see a regulatory approval coming its way for another weight-loss drug – orforglipron – as early as next year. ^[1] This clubbed with expected market share gains as well as the launch of weight-loss drugs in new markets is expected to drive Eli Lilly’s sales going forward.

Admirably, LLY stock has generated better returns than the broader market in each of the last four years. Similarly, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment around rate cuts and geopolitical tensions, could LLY see a strong jump? We think so. With a solid 2025 outlook and the strong expected growth over the next few years, the current dip in LLY stock offers an opportunity for long-term investors. Notably, the $985 average of analysts price estimate reflects over 30% upside from current levels.

While LLY stock looks like it can see higher levels, it is helpful to see how Eli Lilly peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

[1] Returns as of 1/15/2025
[2] Cumulative total returns since the end of 2016

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1. Lilly Sees New Weight-Loss Pill Approval in Early 2026, CEO Says, Ike Swetlitz and Katie Greifeld, Jan 13, 2025, Bloomberg [↩]