Eli Lilly’s (LLY) stock continues to sink as enthusiasm for the company’s weight-loss pill quickly fades.
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LLY stock is down about 1% in early trading on Aug. 8 following a 15% decline the day before after the pharmaceutical company announced the results of a late-stage clinical trial that disappointed investors. Eli Lilly reported that its daily obesity pill helped patients lose about 12% of their body weight at 72 weeks. Analysts and investors had expected 15% weight loss among patients in the trial.
Additionally, many patients on the weight-loss pill stopped using it due to side effects that include vomiting and diarrhea. The reported results led to a steep selloff in LLY stock as hopes for the weight-loss pill quickly evaporated.
Strong Print
The trial results for the obesity pill completely overshadowed what were blockbuster financial results from Eli Lilly. For this year’s second quarter, the company beat Wall Street forecasts on the top and bottom lines and raised its forward guidance. The strong print was driven by sales of its injectable Zepbound weight-loss drug, which registered a 172% year-over-year sales increase.
The beat-and-raise quarter was also driven by sales of Eli Lilly’s diabetes treatment Mounjaro, which topped expectations with $5.2 billion in sales, up 68% from a year earlier. Eli Lilly’s overall sales in Q2 were up 38% from the same period in 2024. Yet the strong showing couldn’t save LLY stock from a big selloff on news of the weight-loss pill trial’s findings.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 16 Buy and three Hold recommendations issued in the last three months. The average LLY price target of $978.31 implies 53.85% upside from current levels.
