Eli Lilly (LLY) stock is higher Thursday after the pharmaceutical company beat profit expectations and matched revenue forecasts for its fourth quarter and issued a better-than-expected outlook for 2025.
In the three months ending December 31, Eli Lilly's revenue increased 44.7% year over year to $13.5 billion, driven by demand for its weight-loss drugs, Mounjaro and Zepbound. Earnings per share (EPS) rose 113.7% from the year-ago period to $5.32.
"2024 was a highly successful year for Lilly," said Eli Lilly CEO David Ricks in a statement. In addition to success with its weight-loss drugs, Ricks cited "major data readouts for tirzepatide in treating chronic disease associated with obesity."
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Eli Lilly also "invested billions more" in its manufacturing capacity and launched Kisunla and Ebglyss. The latter will be "important drivers of our long-term balanced growth outlook," Ricks said. Kisunla is designed to treat early stage Alzheimer's disease, while Ebglyss is for eczema.
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $13.5 billion and earnings of $5.01 per share, according to MarketWatch.
For 2025, Eli Lilly expects to achieve revenue in the range of $58 billion to $61 billion and earnings of $22.50 to $24 per share. The midpoints of these ranges, revenue of $59.5 billion and earnings of $23.25 per share, came in ahead of analysts' expectations of revenue of $58.8 billion and earnings of $22.76 per share.
"We enter 2025 with tremendous momentum and look forward to strong financial performance and several important Phase 3 readouts which, if positive, will further accelerate our long-term growth," Ricks said.
That should support the drug maker's quarterly payout to shareholders as well. Eli Lilly's long track record makes it one of Wall Street's best dividend stock.
Competition in the weight-loss drug category with Novo Nordisk (NVO) and its Ozempic continues to define Eli Lilly's results. A recent Food and Drug Administration clarification of the tirzepatide shortage should help both LLY and NVO.
Is Eli Lilly stock a buy, sell or hold?
LLY tumbled 6.6% on January 14 after management pre-announced fourth-quarter results. Sales for Mounjaro and Zepbound met expectations set in mid-January, and Wall Street sees further upside for the healthcare stock.
According to S&P Global Market Intelligence, the consensus analyst target price for LLY stock is $975.09, representing implied upside of about 14% to current levels. And the consensus recommendation is Buy.
Financial services firm Jefferies has a Buy rating on the large-cap stock with a $994 price target.
"We're bullish on LLY for several reasons," Jefferies analyst Akash Tewari said in a December 19 note, citing Eli Lilly's attractive growth profile in a recessionary environment and the potential for GLP-1s to be among the biggest drug classes of all time.
The analyst also sees near-term upside for both revenue and EPS growth.
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