Eli Lilly Earnings: GLP-1 Market Growth Looks Solid

Key Morningstar Metrics for Eli Lilly

• Fair Value Estimate: $620.00
• Morningstar Rating: ★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of Eli Lilly’s Earnings

Eli Lilly LLY confirmed its fourth-quarter performance and 2025 guidance released in mid-January, with 45% revenue growth and a more than doubling of non-GAAP EPS in the quarter. Management’s 2025 guidance implies 32% revenue growth and 79% non-GAAP EPS growth at the midpoint.

Why it matters: Investors have been watching for signs that GLP-1 market growth is slipping below sky-high expectations, but the firm’s guidance and market commentary suggest that may not happen soon.

• We think the underlying GLP-1 market growth looks solid, with 45% prescription growth across the market in the fourth quarter and net pricing headwinds steady at a mid-to-high-single-digit decline.
• We expect Lilly to continue to grow faster than the market, and model 60% 2025 Lilly GLP-1 sales growth. Lilly gained 5 points in US prescription share in 2024, and Zepbound’s 56% share of new prescriptions bodes well for similar 2025 gains.

The bottom line: We’re raising our fair value estimate to $620 per share from $580 to account for higher long-term growth from the oncology and immunology portfolio, which supports Lilly’s wide moat, but we think the market assigns the stock too high a premium, considering long-term headwinds from obesity competition.

• We think the GLP-1 market could grow 42% in 2025 to more than $75 billion, with Lilly’s 60% growth ($13 billion incremental sales) exceeding Novo Nordisk’s NVO potential 30% growth ($9 billion incremental sales).

Coming up: Two key Lilly obesity pipeline programs will start generating data this year and could significantly affect our fair value estimate.

• We’re carefully watching for Attain data (obesity without diabetes) in the third quarter. We currently include a late 2026 launch and $10 billion peak sales for orforglipron, but this could easily double with positive data.
• Retatrutide could also have phase 3 data starting in late 2025. We see retatrutide as a higher-risk program without the scalability of orforglipron, and we assume less than $3 billion in 2033 sales.