Eli Lilly Earnings: International Tirzepatide Sales Outpaced Our Expectations

Key Morningstar Metrics for Eli Lilly

• Fair Value Estimate: $700.00
• Morningstar Rating: ★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of Eli Lilly’s Earnings

Eli Lilly LLY reported 54% revenue growth in the third quarter as its diabetes and obesity drug tirzepatide (Mounjaro/Zepbound) continued to gain share globally, and management raised top- and bottom-line guidance. Shares rose nearly 4% on Oct. 30.

Why it matters: Lilly’s strong international growth of tirzepatide exceeded our expectations. However, news of Novo Nordisk’s surprise unsolicited bid for Metsera (already pending a sale to Pfizer) likely limited the rise in shares, as Metsera’s pipeline in Novo’s hands could create a stronger competitor.

• We see a $180 billion market for GLP-1 therapies by 2034 ($60 billion diabetes and $120 billion obesity/overweight). While we think Lilly will hold a more than 50% share for the foreseeable future, we see an underappreciated room for innovation from Novo and new entrants like Metsera.
• Lilly’s US portfolio saw a high-single-digit decline in prices in the quarter, and we don’t think the market is fully accounting for upcoming pricing headwinds as Lilly and Novo launch oral drugs in 2026 and as new competitors enter starting in 2028.

The bottom line: We’re raising our fair value estimate for wide-moat Lilly to $700 per share from $650 after factoring in stronger international Mounjaro sales. We agree with the market’s near-term optimism surrounding Lilly’s growth potential. However, given the competitive risks, we view the shares as 20% overvalued.

• We expect the launch of oral GLP-1 orforglipron in 2026 to create another popular treatment option for obesity and diabetes patients, and we forecast peak sales north of $20 billion. Near-term maintenance data could help extend the duration of obesity therapy and add upside to our estimates.
• Novo is likely to receive approval of its oral semaglutide for obesity first. Still, the extent of its lead could rest on whether Lilly receives a national priority review voucher, which could allow Lilly to launch in early 2026 as well.