Eli Lilly Shares Plummet Despite Q2 Earnings Beat, Guidance Upgrade

Eli Lilly's stock plunged despite strong Q2 2025 results and upgraded guidance, likely due to investor skepticism about its weight loss treatments. The company's robust performance and increased revenue expectations were overshadowed by concerns about the long-term viability of its treatments. Despite this, Eli Lilly's stock remains a good investment opportunity for those willing to take on risk.

Eli Lilly reported its earnings for the second quarter of 2025, 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 [1].

Key Takeaways

Eli Lilly’s Q2 2025 EPS of $6.31 exceeded expectations by 12.88%. Revenue grew by 38% year-over-year, reaching $15.56 billion. Stock price dropped 13.37% pre-market despite strong earnings. Full-year revenue guidance was raised to $60-62 billion. The company plans to increase incretin dose production by 1.8 times in 2025 [1].

Market Reaction

Despite Eli Lilly’s impressive earnings, the stock fell 13.37% in pre-market trading, closing at $674.37. The 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 [1].

Outlook & Guidance

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. With a robust revenue CAGR of 15% over the past five years and an impressive gross profit margin of 81.7%, Eli Lilly demonstrates strong operational efficiency [1].

Conclusion

Eli Lilly’s strong Q2 2025 results and upgraded guidance were overshadowed by investor skepticism about its weight loss treatments. The company's robust performance and increased revenue expectations were not enough to offset concerns about the long-term viability of its treatments. Despite this, Eli Lilly's stock remains a good investment opportunity for those willing to take on risk.

References

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