Eli Lilly earnings: Revenue increases reflect global demand for oral obesity therapies
We’ve raised our fair value estimate of Lilly stock.
Mentioned: Eli Lilly and Co (LLY)
Key Morningstar metrics for Eli Lilly
- Fair Value Estimate: $870.00
- Morningstar Rating: ★★
- Morningstar Economic Moat Rating: Wide
- Morningstar Uncertainty Rating: High
What we thought of Eli Lilly’s earnings
Eli Lilly LLY reported increases of 43% in revenue and 42% in non-GAAP earnings per share for the fourth quarter. For 2026, management guided for $81.5 billion in revenue (25% growth) and non-GAAP EPS of $34.25 (41% growth) at the midpoint. The shares were up 10% intraday on Feb. 4.
Why it matters: Lilly’s strong 2025 results and management’s expectations for continued double-digit growth in 2026 are a contrast with peer Novo Nordisk, which has guided to shrinking revenue this year as US price concessions are compounded by share losses, despite a still-growing incretin market.
- Lilly appears to be expertly navigating a potential low-to-mid-teens pricing headwind this year by driving continued penetration of the obesity self-pay market in the US and internationally.
- We think strong revenue growth will allow Lilly to maintain operating margins despite declining prices. We’re intrigued by the potential of Zepbound and next-generation therapies to complement existing treatments in areas like immunology and neurology.
The bottom line: We’re raising our fair value estimate for wide-moat Eli Lilly to $870 per share from $770 after slightly raising our 2026 forecast and significantly increasing our estimates for Lilly’s orforglipron. Despite this increase, we think momentum has pushed Lilly shares ahead of their intrinsic value.
- We think Lilly’s orforglipron has a clear upper hand internationally over Novo’s Wegovy pill due to ease of manufacturing. We now model global peak sales of $40 billion for orforglipron (up from our prior $30 billion forecast) after seeing strong demand for Novo’s Wegovy pill so far in the US self-pay market.
- We think orforglipron’s launch (likely in the second quarter in the United States and in 2027 internationally) will remain the biggest catalyst for Lilly shares, although additional readouts for triple agonist retatrutide in diabetes and obesity could further strengthen Lilly’s high-efficacy positioning.
