Eli Lilly (LLY) USD (CDI)
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HL comment (4 February 2026)
No recommendation - No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.
Eli Lilly’s fourth-quarter revenue grew 43% to $19.3bn (consensus $18.0bn) driven by volume growth in its best sellers, Mounjaro and Zepbound.
Underlying operating profit was up 52% to $8.6bn as revenue growth outpaced cost expansion.
2026 sales are expected land in the $80bn-$83bn range, reflecting growth of 25% at the mid-point and better than consensus forecasts. Underlying earnings per share guidance stands at $33.50-$35.00, implying growth of about 41%.
The shares rose 7.8% in early trading.
Our view
Eli Lilly’s fourth-quarter results add some extra polish to its position as top dog in the GLP-1 space, with further market share gains underpinning a strong end to the year and impressive guidance for 2026.
The global pharmaceutical company is one of the trailblazers helping to revolutionise treatments for hormone deficiencies such as diabetes. But sales of GLP-1 treatments have also been grabbing attention for their effectiveness as a weight management tool. Its injectable medications stack up well against the competition, which has helped the group reach a dominant position.
The boom in demand led to pressure on the firm’s manufacturing facilities, but this now looks to be resolved, with the addition of new US facilities a positive when it comes to staying on the right side of tariffs. Launches in new markets and approvals for use in other disease areas are significant opportunities for Lilly’s lead GLP-1 compound. But both of these growth levers carry a high level of execution risk.
Both competitive and political forces are putting downward pressure on prices. However, its efficient operations and relatively competitive stance on pricing held it in good stead in 2025. It’s well placed to benefit if US federal health insurance coverage kicks in as expected later this year.
Lilly’s experimental weight-loss pill orforglipron is expected to hit the market in the second quarter. But there have been some doubts raised about its commercial appeal, so there’s work to be done if it’s to close rival Novo Nordisk’s first mover advantage, whose oral formulation is off to a flying start.
The company’s generous Research & Development budget has helped to create a robust pipeline, not only in cardiometabolic health, on which GLP-1s focus, but also in cancer, neuroscience and auto-immune conditions.
While research success is never guaranteed, it does provide a route to mitigate the industry-wide pressure of patent expirations, where manufacturers eventually lose exclusivity over medicines.
We remain excited by the company's growth prospects, which merit a valuation at the top of the peer group. Based on current expectations, we still see modest scope for upside. However, investors have become accustomed to market-beating numbers and exceptional capital returns. Anything less than perfection could see sentiment swing the other way, meaning shareholders should be ready for downs as well as ups.
Environmental, social and governance (ESG) risk
The pharmaceuticals sector is relatively high-risk in terms of ESG. Product governance, particularly with safety and marketing, and affordable access to treatment are the key risk drivers. Labour relations, business ethics and bribery and corruption are also contributors to ESG risk.
According to Sustainalytics, Eli Lilly’s management of ESG risks is strong. Executive pay is linked to climate-related targets, but the exact mechanism is unclear. Similarly, there are no targets or deadlines set for improving employee diversity and engagement. Its initiatives related to value-based healthcare, as well as ensuring access to its medicine in developing countries, are considered adequate. Disclosure of clinical trial data is strong, but information about quality control in medical manufacturing could be clearer. The company is the subject of several lawsuits alleging anti-competitive practices in the pricing of insulin.
Eli Lilly key facts
Forward price/earnings ratio (next 12 months): 29.6
Ten year average forward price/earnings ratio: 28.2
Prospective dividend yield (next 12 months): 0.7%
Ten year average prospective dividend yield: 1.8%
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.
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