Eli Lilly’s Stock Tumbles as Firm Cuts EPS Guidance Despite Strong Q1

Eli Lilly’s (NYSE: LLY) stock faced a notable decline following the company’s announcement of a reduced profit forecast, despite delivering first-quarter results that surpassed Wall Street expectations.

The pharmaceutical giant reported an adjusted earnings per share (EPS) of $3.34 on revenues amounting to $12.73 billion, both figures exceeding the anticipated EPS of $3.25 and revenue of $12.62 billion. Strong sales of weight-loss medications, Mounjaro and Zepbound, contributed to the robust financial performance, with Mounjaro’s sales surpassing projections.

However, the company adjusted its full-year EPS forecast downwards due to net losses on investments in equity securities and charges related to acquired in-process research and development, totaling $1.57 billion in the first quarter. Despite maintaining its revenue guidance, the adjusted EPS is now estimated between $20.78 to $22.28, a reduction from the previous range. Following the announcement, Eli Lilly’s shares, which had seen a rise of over 16% this year, dropped by more than 7%.

Eli Lilly’s First-Quarter Shows Impressive Sales, Full-Year EPS Forecast Revised Downward

Eli Lilly’s first-quarter financial performance was marked by impressive sales figures that exceeded market expectations. The company reported an adjusted EPS of $3.34, surpassing the projected $3.25, and a revenue of $12.73 billion, outdoing the anticipated $12.62 billion.

A significant contributor to these results was the strong demand for its weight-loss medications, Mounjaro and Zepbound, with Mounjaro’s sales notably outperforming forecasts. Despite these positive outcomes, the company revised its full-year EPS forecast downward due to substantial net losses on investments in equity securities and charges related to acquired in-process research and development, totaling $1.57 billion.

This adjustment has led to a revised EPS projection of $20.78 to $22.28, down from the previous estimates.

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LLY Stock Brief

The announcement of a reduced profit forecast had an immediate impact on Eli Lilly’s stock price, which saw a significant drop. On May 1, 2025, the stock opened at $844.00, down from the previous close of $898.95, and continued to decrease, reaching a low of $825.00. By 11:02 EDT, the stock was trading at $830.44. This decline follows a period of growth where the stock had risen over 16% earlier in the year.

Despite the drop, the company’s market capitalization remains robust at $745.73 billion. Key financial metrics such as a trailing P/E ratio of 71.0385 and a forward P/E ratio of 36.64784 reflect investor confidence in the company’s long-term potential, though short-term challenges have affected current valuations.

Analysts maintain a ‘Buy’ recommendation, with a target mean price of $991.9726, suggesting optimism about future stock performance.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.