It might be. Eli Lilly (LLY) has tacked on nearly $250 billion in market cap over the past year, fueled by Mounjaro mania and Zepbound’s explosive launch — but now Wall Street is starting to hesitate. With Q1 earnings due Tuesday morning, analyst expectations are sky-high, yet recent downgrades and valuation worries are creeping in.
Analysts Expect Massive Growth from Eli Lilly’s Weight-Loss Drugs
Eli Lilly is forecast to post earnings of $4.17 per share on $12.67 billion in revenue. That’s a 34% and 45% jump year-over-year, respectively. Most of the heavy lifting is expected from its diabetes and obesity blockbusters: Mounjaro could hit $3.75 billion, while Zepbound may bring in $2.2 billion this quarter alone.
Zepbound launched in late 2023 and is already on pace to rival Ozempic and Wegovy in demand, according to IQVIA prescription data.
HSBC Slashes LLY Rating over Valuation Concerns
But not everyone is buying the hype. HSBC’s Rajesh Kumar just issued a rare double downgrade, cutting LLY from Buy to Reduce while slashing its price target from $1,150 to $700. The firm said valuation is “detached from fundamentals,” and warned of rising competition in GLP-1s.
That downgrade comes as short interest on LLY quietly ticked higher in April, up nearly 15% month-over-month.
Lilly Spends Big to Dodge Tariff Risks
As tariff threats mount, Lilly announced a $27 billion plan to build four new U.S. manufacturing plants. The move comes just weeks after the Biden administration signaled new drug import tariffs could be on the table, rattling investors across the health sector.
The XLV health care ETF (XLV) sank 7.8% in four sessions following the announcement as pharma stocks lost their safe-haven glow.
Oral GLP-1 Pill Adds to the Excitement
Adding fuel to the fire, Lilly’s oral weight-loss drug, orforglipron, is showing early promise. TIME reported the pill may offer similar results to injectables like Mounjaro, but in an easier-to-use format.
Investors will be looking for updates on the trial timeline — and whether Lilly can dominate both injectable and oral markets.
LLY is still trading near $900 and holding a market cap over $850 billion. That’s a lot of weight riding on just a few drugs. If earnings blow past estimates again, bulls may push for $1 trillion. But any softness — or margin warnings — could give bears fresh ammo.
Is LLY Stock a Good Buy?
Despite HSBC’s downgrade, 19 out of 20 analysts still rate Eli Lilly a “Buy,” according to TipRanks. The average 12-month LLY price target is $984.63 — about 9.5% above Monday’s close at $898.95. But the spread tells the real story: the highest target sits at $1,124, while the lowest — from HSBC — is a sharp $700.
That valuation gap reflects the exact tension driving the question in our pre-earnings breakdown: Is Eli Lilly Stock Too Expensive Ahead of Earnings?
