Eli Lilly Stock Drops on Q4 Guidance Miss, but Long-Term Outlook Remains Strong

Shares of Eli Lilly and Company (LLY) took a hit on Tuesday after the pharmaceutical giant missed its fourth-quarter guidance, sending the stock down by more than 6%. The company's revenue for the quarter is now expected to be approximately $13.5 billion, which is around $400 million below the low end of its previously issued guidance. This miss was primarily attributed to slower-than-expected growth in the U.S. incretin market and lower-than-anticipated channel inventory at year-end.



Despite the Q4 guidance miss, Eli Lilly's long-term outlook remains strong, driven by its robust diabetes and weight loss treatments, Mounjaro and Zepbound. The company anticipates revenue growth contributions in 2025 from new Lilly medicines such as Jaypirca, Ebglyss, Omvoh, and Kisunla; approvals of new indications for existing Lilly medicines; and potential launches of new medicines such as imlunestrant for metastatic breast cancer. Incretin market and channel dynamics have been factored into the 2025 revenue guidance range.



Eli Lilly is also taking steps to address inventory and supply issues that have plagued the company in the past. CEO Dave Ricks stated that the company has "tons of supply coming online" and that it will add more manufacturing capacity. This will help meet the soaring demand for its incretin drugs and prevent future shortages. The company expects to produce at least 60% more salable doses of its incretin drugs in the first half of 2025 compared to the same period in 2024.



In conclusion, while Eli Lilly's Q4 guidance miss may have caused a temporary dip in the stock's value, the company's long-term outlook remains strong, driven by its innovative diabetes and weight loss treatments, as well as its commitment to addressing inventory and supply issues. Investors should remain confident in the company's ability to deliver strong financial and operational performance in the coming years.