Eli Lilly Q2 Earnings Exceed Expectations: A Buy the Dip Moment

Eli Lilly reported Q2 earnings that exceeded expectations, with revenues of $15.6bn and adjusted EPS of $6.31. The company hiked its full-year revenue guidance to $60bn-$62bn. Despite a bombshell oral weight loss treatment, the earnings are a "buy the dip" moment according to the article.

Eli Lilly and Company (LLY) reported its second-quarter (Q2) 2025 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $6.31, compared to the forecasted $5.59. Revenue reached $15.56 billion, exceeding predictions of $14.67 billion. Despite these strong results, the stock fell 13.37% to $674.37 in pre-market trading, influenced by broader market conditions and investor sentiment.

The company's Q2 2025 EPS of $6.31 exceeded expectations by 12.88%, and revenue grew by 38% year-over-year. Eli Lilly's gross margin improved to 85%, reflecting a 3 percentage point increase year-over-year. The company's robust performance was driven by strong demand for its incretin therapies and successful product launches in key markets.

Eli Lilly raised its full-year revenue guidance to $60-62 billion and increased its full-year EPS guidance to between $21.75 and $23.00. The company plans to submit its obesity treatment, orforglipron, for approval by year-end and is exploring additional indications for tirzepatide.

Despite the strong earnings, the stock's decline may reflect broader market trends or investor concerns about future growth prospects. The stock's current price is well below its 52-week high of $972.53, indicating a cautious market sentiment. InvestingPro analysis suggests the stock is currently undervalued, with analyst price targets ranging from $650 to $1,190.

Eli Lilly's beta of 0.44 indicates relatively low price volatility compared to the market. The company has maintained dividend payments for 55 consecutive years, with a 15.38% dividend growth in the last twelve months, highlighting its financial stability and commitment to shareholder returns.

Executives commented on the quarter's performance. CEO Dave Ricks stated, "Q2 was a strong quarter. We delivered robust revenue growth, shared top-line clinical data from multiple Phase III programs." Chief Scientific Officer Dan Skovronsky added, "We believe orforglipron has the potential to be a more convenient alternative to injectable treatments."

Potential supply chain disruptions, market saturation in the incretin analog class, and regulatory hurdles for new product approvals could impact Eli Lilly's future growth. However, the company's strong operational efficiency and robust pipeline position it well for continued success.

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[1] https://za.investing.com/news/transcripts/earnings-call-transcript-eli-lilly-q2-2025-beats-forecasts-stock-drops-93CH-3826998