Key Morningstar metrics for Eli Lilly

  • Fair Value Estimate: $900.00
  • Morningstar Rating: ★★★
  • Morningstar Economic Moat Rating: Wide
  • Morningstar Uncertainty Rating: High

What we thought of Eli Lilly’s earnings

Eli Lilly LLY reported 56% revenue growth and 156% non-GAAP EPS growth in the first quarter, and management raised full-year revenue guidance by $2 billion to a range of $82 billion-$85 billion, implying 28% growth at the midpoint. Shares rose 10% intraday on April 30.

Why it matters: Given the significant price drop in cash-pay markets for obesity drug Zepbound in the United States starting in late 2025 and diabetes drug Mounjaro’s China launch, there was some uncertainty about how well market volume growth and share gains would counter that pressure.

  • With a 65% increase in global volumes across Lilly’s portfolio, the 13% price headwind had a minimal effect on the gross margin, and revenue grew fast enough to improve the operating margin.
  • Foundayo’s April 2026 obesity launch isn’t reflected in first-quarter numbers, but management commentary was encouraging, highlighting the upcoming filing in diabetes later this quarter and rapid expansion of commercial and Medicare coverage over the next few months.

The bottom line: We’re raising our fair value estimate for wide-moat Lilly to $900 per share from $870 after including higher near-term growth for Mounjaro/Zepbound and operating leverage, partly countered by our decision to keep gross margins below the high level from 2025 (83%) throughout our forecast.

  • While Lilly commented that US Zepbound prices are relatively stable following the cash and government channel price reset, we’re still watching prescription trends for evidence that commercial (private insurance) prices will also trend toward these new benchmarks.
  • That said, Zepbound approvals in adjacent indications (like sleep apnea) and tying its use to other Lilly drugs (like the Taltz/Zepbound combination in psoriasis) could help maintain stronger overall US pricing and make it more difficult for competitors to steal commercial share.