Eli Lilly Stock Suffers Worst Decline Since 2008, Analysts Reaffirm Buy Ratings

Eli Lilly's stock fell 15% after disappointing weight-loss pill trial results. However, analysts reaffirm Buy ratings and point out strong Q2 financial results, market share gain from Novo Nordisk, and potential FDA approval for the oral weight-loss medication in early 2026. The stock has a consensus Strong Buy rating with a price target of $946.89, implying 47.81% upside from current levels.

Eli Lilly's (LLY) stock experienced a significant drop of 15% on Thursday following the release of trial results for its experimental weight-loss pill, orforglipron. The drug, designed to help adults with obesity lose weight, fell short of investor expectations, with patients losing an average of 12.4% of their body weight over 72 weeks [1]. This was less than the 15% weight loss that some analysts had anticipated [2].

Despite the underwhelming trial results, Eli Lilly maintained a positive outlook for the drug, stating that it plans to submit a marketing application for orforglipron to the FDA by the end of 2025 [1]. The company's CEO, David Ricks, emphasized that the medication's effectiveness, especially in comparison to injectable GLP-1 therapies, validates its potential as a once-daily oral therapy for long-term disease management [1].

The broader market context also played a role in the stock's decline. Eli Lilly's rival, Novo Nordisk, recently cut its full-year guidance and faced a temporary lead in the oral GLP-1 race due to the underperformance of its obesity drug, Wegovy [2]. However, Novo Nordisk's Q2 earnings showed strong financial performance, with a 32% increase in net profit and an 18% rise in sales [3].

Analysts, despite the trial setback, remain bullish on Eli Lilly's prospects. Truist Securities expects the company to have a "first-mover advantage" in the oral market, highlighting Lilly's strong Q2 financial results and robust sales of its GLP-1 drugs, Zepbound and Mounjaro [1]. These drugs, which are used for diabetes treatment, contributed significantly to Eli Lilly's revenue growth in the second quarter. Zepbound sales, in particular, surged 172% year over year, while Mounjaro's sales increased by 68% [1].

The consensus among analysts is that the recent stock decline is a near-term blip. The oral GLP-1 market is expected to continue growing, and Eli Lilly's obesity pill could still gain market share. Furthermore, the company's strong Q2 results and the potential FDA approval for orforglipron in early 2026 support a positive outlook for the stock [1].

References:
[1] https://finance.yahoo.com/news/eli-lilly-raises-2025-outlook-133901442.html
[2] https://www.emarketer.com/content/eli-lilly-s-obesity-pill-disappoints--still-holds-market-advantage-over-rival-novo-nordisk
[3] https://www.ainvest.com/news/novo-nordisk-q2-results-show-strong-profit-competition-rival-treatments-weighs-sales-2508/