Eli Lilly posted another strong quarter, prompting an increase in our price target to $1,300. The company reported revenue of $22.97 billion for the period ending in June, marking a 48% increase from last year. This result finished well above the $20.7 billion consensus estimate. Adjusted earnings per share reached $8.38, significantly outpacing the $6.01 expected by analysts.
Growth is driven by the company’s GLP-1 portfolio, specifically the injectable treatments Mounjaro and Zepbound. While price per unit saw a decline, volume growth more than compensated for these adjustments. Expanded access through the Medicare GLP-1 Bridge program now covers roughly 20 million Americans, providing a clear demand signal for the remainder of the year and into 2027.
The launch of Foundayo, an oral GLP-1 alternative, represents a new area of focus. Though initial revenue of $98 million landed slightly below analyst expectations, management reports that prescription volume for the drug doubled in a single month. CEO David Ricks stated that the company is currently seeing one out of four new oral GLP-1 starts choose their medication. Increased physician education and formulary additions appear to be the primary drivers of this adoption curve.
Beyond the obesity and diabetes franchise, the broader business is performing well. Sales of the eczema treatment Ebglyss more than doubled compared to last year, while the oncology drug Jaypirca saw a 56% revenue increase. In the neuroscience division, Alzheimer’s treatment Kisunla sales tripled. Lilly’s ability to move beyond a single-product story suggests stability for the firm.
Full-year revenue guidance is now set at $85 to $87 billion, with a performance margin expected between 49% and 50.5%. We maintain our hold-equivalent rating but have adjusted the price target to account for the current trajectory. Management remains focused on the upcoming submission for the next-generation injectable, retatrutide, scheduled for the first quarter of 2027.