Lilly (LLY) Down 3.7% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Eli Lilly (LLY). Shares have lost about 3.7% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Lilly due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Q4 Earnings & Sales Beat

Lilly reported fourth-quarter 2025 adjusted earnings per share (“EPS”) of $7.54, which beat the Zacks Consensus Estimate of $6.99 per share. Earnings rose 42% year over year. 

Adjusted EPS included acquired IPR&D charges of 52 cents in the fourth quarter compared with 19 cents per share in the year-ago quarter.

Revenues of $19.3 billion rose 43% year over year, driven by the robust uptake of Mounjaro and Zepbound. Total revenues beat the Zacks Consensus Estimate of $17.87 billion

Higher volumes of drugs like Mounjaro, Zepbound and Verzenio were partially offset by lower sales of Trulicity. Lilly’s new products also contributed to sales growth.

Lilly’s key new products (Ebglyss, Inluriyo, Jaypirca, Kisunla, Mounjaro, Omvoh, Verzenio and Zepbound) contributed over $13 billion to revenues in the fourth quarter and grew 91% year over year.

In the reported quarter, net realized prices declined 5%, while volumes rose 46%. 

While U.S. revenues rose 43% to $12.9 billion, ex-U.S. revenues rose 43% to $6.4 billion.

Mounjaro and Zepbound Sales Outperform

Mounjaro recorded sales of $7.41 billion during the quarter, up 110% year over year. The reported sales figure beat the Zacks Consensus Estimate of $6.65 billion.

Mounjaro sales rose 57% to $4.1 billion in the United States, driven by increased demand, partially offset by lower pricing. International sales were $3.3 billion compared with $899.0 million in the year-ago quarter, benefiting from launches in new markets. 

Zepbound recorded sales of $4.26 billion in the quarter, up 123% year over year, driven by increased demand, partially offset by lower pricing. Zepbound revenues beat the Zacks Consensus Estimate of $3.87 billion. 

Robust growth trends in the U.S. incretin analogs market and positive uptake trends of Mounjaro and Zepbound in new international markets led to strong sales growth in 2025 and the positive trend is expected to continue in 2026.

In the United States. Mounjaro is the market leader within type II diabetes incretin analogs. Its total prescriptions grew by 33% year over year in the fourth quarter. Mounjaro commanded 55% of new prescriptions in the type II diabetes incretin market.

In international markets, Lilly said it has launched Mounjaro in all major markets, and the injection is now the incretin share market leader in ex-U.S. markets as well.

Zepbound captured 70% share of new prescriptions in the fourth quarter, with Zepbound vials accounting for nearly 50% of new Zepbound prescriptions in the fourth quarter.

On the conference call, Lilly said it expects to launch orforglipron for obesity in the United States during the second quarter of 2026 and in most international markets during 2027.

Key Drugs’ Sales Numbers

Trulicity generated revenues worth $1.04 billion, down 17% year over year.  Sales of Trulicity beat the Zacks Consensus Estimate of $1.0 billion.

Sales of Trulicity are being hurt due to competitive dynamics, including patient switches to Mounjaro and lower realized prices.

Jardiance sales declined 36% to $768 million. Jardiance missed the Zacks Consensus Estimate of $776.0 million.

Taltz brought in sales of $1.05 billion, up 10% year over year. Taltz beat the Zacks Consensus Estimate of $955.0 million.

Verzenio generated sales of $1.60 billion in the reported quarter, up 3% year over year, as higher sales in outside United States markets were partially offset by a decline in the United States. Verzenio sales missed the Zacks Consensus Estimate of $1.62 billion. U.S. sales of Verzenio were hurt due to soft demand trends, as overall market penetration reached a plateau.

Emgality generated revenues of $246.0 million in the quarter, down 1% year over year. Olumiant (baricitinib) generated sales of $267.0 million, up 2% on a year-over-year basis.

Cyramza’s revenues of $262.0 million were up 1% year over year. 

Among the established products, Humalog sales declined 15% to $529.0 million. Humulin sales declined 36% to $180.0 million.

Among the newer drugs, Jaypirca recorded $148.0 million in sales, up 30% year over year. Omvoh and Ebglyss recorded sales of $88.0 million and $134.0 million, respectively, in the quarter, compared with $64.9 million and $127.1 million in the previous quarter.

Sales of the new Alzheimer’s drug Kisunla were $109.0 million in the fourth quarter compared with $70.4 million in the previous quarter, driven by increased market share, overall market growth and increased awareness and diagnosis of Alzheimer's disease. Lilly has completed the international rollout of Kisunla.

Gross Margin & Operating Income

Adjusted gross margin was 83.2%, flat year over year, as a favorable product mix and improved production costs were partially offset by lower realized prices.

Marketing, selling and administrative expenses increased 29% to $3.1 billion to support the launch of new products and indications. R&D expense increased 26% to $3.8 billion in the quarter due to higher costs for early and late-stage pipeline portfolios. 

Adjusted performance margin, which is gross margin less R&D, marketing, selling and administrative expenses, was 47.2% up more than 4.2 percentage points year over year, driven by revenue growth. 

The adjusted effective tax rate was 19.7% compared with 13.2% in the year-ago quarter.

2025 Results

Full-year 2025 sales rose 45% to $65.2 billion, which significantly beat the Zacks Consensus Estimate of $63.54 billion as well as the guided range of $63.0 billion to $63.5 billion. 

Adjusted earnings for 2025 were $24.21 per share, up 86% year over year. Earnings beat the Zacks Consensus Estimate of $23.74 per share as well as the guided range of $23.00 to $23.70 per share.

2026 Financial Guidance

Lilly issued its financial guidance for 2026.
                
In 2026, Lilly expects to record revenues in the range of $80 billion to $83 billion, representing an increase of 25% at the midpoint.

Lilly expects continued robust growth of Mounjaro and Zepbound in 2026. While newer drugs like Ebglyss, Jaypirca, Inluriyo, Kisunla and Omvoh are expected to contribute to growth in 2026, late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat or decline. 

Earnings per share are expected to be in the range of $33.50 to $35.00. 

Adjusted gross margin is expected to be relatively stable to slightly down in 2026. R&D expenses are expected to increase in 2026 as the company expands its pipeline and plans to initiate more phase III studies in 2026. Marketing, selling and administrative expenses are also expected to rise in 2026.

The company provides guidance for a new ratio (Gross Margin - OPEX)/Revenue), which represents margin after subtracting R&D costs and marketing and administrative costs from gross margin and dividing that figure by revenues. This ratio is expected to be in the range of 46.0% to 47.5% in 2026.

The adjusted tax rate is expected to be in the range of 18% to 19%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 7.82% due to these changes.

VGM Scores

At this time, Lilly has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Lilly has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Lilly belongs to the Zacks Large Cap Pharmaceuticals industry. Another stock from the same industry, Johnson & Johnson (JNJ), has gained 0.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Johnson & Johnson reported revenues of $24.56 billion in the last reported quarter, representing a year-over-year change of +9.1%. EPS of $2.46 for the same period compares with $2.04 a year ago.

Johnson & Johnson is expected to post earnings of $2.68 per share for the current quarter, representing a year-over-year change of -3.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Johnson & Johnson has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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