Morningstar

Eli Lilly Earnings: Strong Q2 and Higher Margin Expectations

We’ve raised our fair value estimate of Lilly stock.

Eli Lilly and Company, Pharmaceutical company headquarters.
Cristina Arias/Cover via Getty
Securities in This Article
Eli Lilly and Co
(LLY)

Key Morningstar Metrics for Eli Lilly

  • Fair Value Estimate
    : $980.00
  • Morningstar Rating
    : ★★
  • Morningstar Economic Moat Rating
    : Wide
  • Morningstar Uncertainty Rating
    : High

What We Thought of Eli Lilly’s Earnings

Eli Lilly LLY reported 48% second-quarter revenue growth and 33% non-GAAP EPS growth, which included acquisition charges. Management raised the midpoints of its 2026 guidance to $86 billion in revenue and $36 per share in non-GAAP EPS. Shares rose 5% on Aug. 5.

Why it matters: Impressive growth for tirzepatide, particularly internationally (branded as Mounjaro), allowed Lilly to raise full-year revenue guidance once again, now roughly $4.5 billion higher at the midpoint than at the start of 2026.

  • Mounjaro (91% growth) and Zepbound (46% growth) led to nearly $15 billion in sales of the tirzepatide molecule in the second quarter, dominating Novo’s injectable franchise, although the launch of oral GLP-1 Foundayo ($98 million in its first quarter) is still lagging Novo’s Wegovy pill.
  • Beyond cardiometabolic, Lilly saw strong double-digit growth across key products in immunology (Ebglyss, Omvoh), oncology (Inluriyo, Jaypirca), and neurology (Kisunla), adding a bit of diversification despite tirzepatide’s dominance at 64% of total revenue in the quarter.

The bottom line: We’re raising our fair value estimate for wide-moat Lilly to $980 per share from $900, after slight adjustments to several drugs in Lilly’s portfolio, as well as our decision to raise our long-term operating margin assumptions and include a placeholder for several early-stage pipeline programs.

  • Our valuation is still below recent prices, as market momentum remains solidly with Lilly and incorporates a P/E multiple of more than 30 times in 2026, while our new fair value estimate implies a 27 times multiple.
  • Key upcoming catalysts will be Foundayo’s international launch (through 2027), Foundayo’s diabetes approval (later this year), and retatrutide’s filing in obesity, osteoarthritis, and sleep apnea (in the first quarter of 2027).

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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