Eli Lilly Exceeds Q4 Expectations, Forecasts Robust 2026 Growth
Eli Lilly has reported fourth-quarter earnings and revenue that significantly surpassed analyst estimates, accompanied by strong 2026 guidance. This impressive performance is largely attributed to surging demand for its key medications, including the weight loss drug Zepbound and the diabetes treatment Mounjaro.
2026 Financial Outlook
For 2026, Eli Lilly projects a highly optimistic financial outlook:
Revenue is expected to range between $80 billion and $83 billion, notably exceeding the analyst expectation of $77.62 billion.
Adjusted earnings per share are projected between $33.50 and $35, also surpassing the analyst expectation of $33.23 per share.
This positive forecast follows comments from Eli Lilly CEO Dave Ricks, who anticipates that expanded government Medicare coverage for obesity treatments will significantly increase the U.S. market for these drugs in the current year, thereby broadening the potential patient pool.
Contrast with Competitor Performance
Eli Lilly's buoyant guidance stands in stark contrast to that of its competitor, Novo Nordisk. Novo Nordisk has indicated potential sales and profit declines for the current year, attributing this to lower U.S. prices and the expiration of exclusivity for its obesity and diabetes drugs in certain international markets. Both companies have faced lower U.S. prices following agreements aimed at reducing the costs of obesity and diabetes drugs.
Eli Lilly is actively working to solidify its position in the competitive GLP-1 drug market. The company is currently seeking approval for its oral weight loss drug, orforglipron, later this year, as Novo Nordisk's Wegovy pill for obesity has already seen a notable U.S. launch.
Fourth-Quarter Performance Highlights
Eli Lilly's fourth quarter demonstrated exceptional growth across its key product lines and overall financial metrics.
Key Product Revenues:
- Mounjaro: Generated $7.41 billion in revenue, marking a substantial 110% increase year-over-year. U.S. sales reached $4.1 billion (up 57%), driven by robust demand despite lower realized prices. These figures notably exceeded analyst expectations.
- Zepbound: Achieved $4.2 billion in U.S. revenue, representing a 122% increase year-over-year. This growth is attributed to heightened demand, even amidst lower realized prices, and surpassed analyst projections of $3.91 billion.
Overall Fourth Quarter Results:
- Adjusted Earnings Per Share: $7.54 (versus $6.67 expected)
- Revenue: $19.29 billion (versus $17.96 billion expected)
Total fourth-quarter revenue surged to $19.29 billion, representing a 43% increase year-over-year. U.S. revenue climbed to $12.9 billion, primarily due to a 50% increase in product volume, predominantly from Mounjaro and Zepbound, though partially offset by reduced realized prices.
Net income for the fourth quarter stood at $6.64 billion, or $7.39 per share, compared to $4.41 billion, or $4.88 per share, in the previous year. Excluding one-time items, adjusted earnings per share were $7.54.
Impact of Drug Pricing Agreements
Agreements made with the previous administration are expected to boost prescription volumes but could impact total sales. These agreements include price reductions for Medicare and Medicaid beneficiaries beginning in 2026, discounted direct-to-consumer sales, and a three-year tariff exemption for both Eli Lilly and Novo Nordisk. CEO Ricks noted that a pricing adjustment is anticipated early this year due to the drug pricing deal, but he foresees volume growth for the company's drugs in the latter half of the year.
Following this announcement, Eli Lilly shares increased by over 7% in premarket trading.