Morningstar

Eli Lilly Earnings: Weak Orforglipron Obesity Data Weighs Down a Strong Quarter

With today’s share drop, we think Lilly stock looks fairly valued.

Eli Lilly and Company, Pharmaceutical company headquarters.
Cristina Arias/Cover via Getty
Securities in This Article
Eli Lilly and Co
(LLY)

Key Morningstar Metrics for Eli Lilly

What We Thought of Eli Lilly’s Earnings

Eli Lilly’s LLY 38% revenue growth and 61% non-GAAP EPS growth in the second quarter were above consensus expectations. Management raised 2025 guidance to ranges of $60 billion-$62 billion in revenue and $21.75-$23.00 in non-GAAP EPS. Lilly also announced Attain-1 obesity data for oral GLP-1 orforglipron.

Why it matters: Lilly saw strong growth as it gained share over Novo Nordisk in the GLP-1 market and was less affected by compounded drugs. However, weak orforglipron obesity data led shares to fall 15% in intraday trading, as investors compared the data with Novo’s oral semaglutide.

  • Orforglipron led to 11.5% placebo-adjusted weight loss at 72 weeks (among those who adhered to high-dose treatment) in Attain-1, versus 13.9% at 64 weeks in Oasis 4 for the 25-mg dose of oral semaglutide, which is on track for Food and Drug Administration approval in late 2025.
  • Data on orforglipron discontinuations due to adverse events look like a red flag at first glance (7.7% placebo-adjusted rate, versus only 1% in Oasis 4), although this statistic hasn’t been informative in past Novo and Lilly trials, and gastrointestinal tolerability measures looked more similar.

The bottom line: We’re maintaining our $650 fair value estimate for wide-moat Eli Lilly, including our assumptions for more than $60 billion in peak tirzepatide sales and $20 billion in orforglipron sales, despite raising our 2025 forecast. With today’s share drop, we think Lilly looks fairly valued.

  • We think recent positive cardiovascular outcomes lend further support to tirzepatide’s strong profile, which should mean continued share gains, despite a near-term headwind from the CVS formulary exclusion for Zepbound that began July 1.
  • We’re closely watching the LillyDirect (cash payment for vials) channel for any signs of plateauing, as it grew to 35% of new Zepbound prescriptions in the second quarter from 25% in the first quarter. We see room to grow, as only about half of employers opt to cover the obesity drug.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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