Eli Lilly (LLY) delivered a second quarter that blew past Wall Street forecasts, powered by surging demand for its obesity drugs, but the share price tells a far more muted story. Despite blockbuster numbers, the stock is up only about 7% year-to-date, a sharp disconnect from the underlying business momentum.
Global revenue in the quarter jumped 48% year over year to $23 billion. Sales in the United States climbed 33% to $14.4 billion, while international revenue soared 80% to $8.6 billion. The obesity franchise remained the dominant growth engine: Mounjaro revenue surged 91% to $9.9 billion, and Zepbound grew 44% to $4.9 billion. Beyond weight loss, key products across immunology, oncology and neuroscience collectively posted a 121% revenue increase.
On the bottom line, adjusted net income rose 32% to $7.5 billion, or $8.38 per share, easily surpassing the consensus estimate of $6.58. Gross margin held firm at 82.83%. With momentum building, management raised its full-year revenue target to a range of $85 billion to $87 billion, up from the prior $82 billion to $85 billion.
Shares of Eli Lilly closed 4.86% higher on the day of the release, giving the company a market capitalization of $1.1 trillion. But the year-to-date gain of roughly 7% has left the stock trailing the broader market. Trading at about 34 times earnings, a significant premium to peers, the valuation suggests that investors have already priced in much of tirzepatide’s success.
Attention is now pivoting to what comes next. Lilly is using the windfall from Mounjaro and Zepbound to strengthen its pipeline, recently acquiring immunotherapy specialist Orna Therapeutics, neurology-focused Centessa Pharmaceuticals, and mental health treatment developer AtaiBeckley. The most closely watched asset is retatrutide, a next-generation obesity candidate. Full Phase 3 data released last month showed substantial weight loss in patients with obesity and related conditions, including type 2 diabetes and cardiovascular disease. The company plans to submit a Biologics License Application to the FDA early next year, setting the stage for a potential launch in 2027.
“With our next-generation weight-loss medicine retatrutide and its complete clinical data package in hand, new manufacturing capacity coming online, and exciting new assets entering our pipeline through business development, Lilly’s future, after 150 years, has never been brighter,” CEO David Ricks said. Whether these upcoming catalysts can close the gap between stellar financial performance and a sluggish stock price is now the question the market is watching most closely.
