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Buy, Sell or Hold LLY Stock? Key Factors to Watch Ahead of Q3 Earnings
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Key Takeaways
Mounjaro and Zepbound sales are estimated at $10.1 billion and $5.1 billion, respectively.
Foundayo generated $98 million in Q2 sales, with revenues expected to rise in the third quarter.
Lilly's expanding pipeline and GLP-1 leadership support long-term growth despite pricing pressure.
Eli Lilly and Company (LLY - Free Report) will report its third-quarter 2026 earnings on Oct. 29, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $22.11 billion and $5.38 per share, respectively. Earnings estimates for 2026 have declined from $36.66 per share to $33.22 per share over the past 30 days.
Image Source: Zacks Investment Research
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 21.25%, on average. In the last reported quarter, the company delivered a positive earnings surprise of 39.43%, as seen in the chart below.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping LLY’s Upcoming Results
In the third quarter, like the past few quarters, the key drivers of Lilly’s top-line growth are likely to have been its popular GLP-1 drugs, diabetes drug Mounjaro and obesity drug Zepbound, driven by high demand trends, partially offset by lower pricing.
The Zacks Consensus Estimate for Mounjaro and Zepbound is pegged at $10.1 billion and $5.1 billion, respectively.
Lilly’s newly launched once-daily oral GLP-1 pill, Foundayo (orforglipron), generated $98 million in second-quarter sales following its April launch. Sales are expected to have been higher in the third quarter.
Rival Novo Nordisk (NVO - Free Report) gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026. Investors will be keen to know how NVO’s obesity pill affected Foundayo’s market share in the quarter.
Beyond Mounjaro and Zepbound, Lilly’s new products, Jaypirca, Ebglyss, Kisunla, Inluriyo and Omvoh are also likely to have contributed significantly to sales growth.
Other drugs like Olumiant and Trulicity are likely to have provided top-line support in the third quarter. However, sales of Verzenio and Emgality declined in the second quarter while Taltz and Cyramza rose only 1%. It remains to be seen if their sales improve in the third quarter.
Jardiance’s sales in the second quarter included a $250 million sales-based milestone associated with Lilly’s collaboration with Boehringer Ingelheim, which is likely to be missing in the third quarter.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $816 million, $918.0 million, $1.54 billion, $866.0 million, $274.0 million and $175.0 million, respectively.
While volumes are expected to have increased for most drugs, lower realized prices (including U.S. Part D changes) are likely to have continued to hurt sales of most drugs, including Mounjaro and Zepbound.
Sales of most established drugs like Forteo, Humalog and Humulin are likely to have declined in the quarter.
Overall, Lilly expects second-half sales growth to be slower than in the first half, as the U.S. rebate/discount estimate adjustments that benefited first-half sales are not expected to recur in the second half. Moreover, the second half faces tougher comparisons from prior-year international launches and normal vacation seasonality in Europe. Moreover, U.S. diabetes has also historically shown fourth-quarter seasonality. Due to these factors, second-half percentage growth may appear to decelerate, though Lilly expects significant absolute-dollar growth in the second half.
Higher marketing, selling and administrative expenses to support the launch of new products and indications are likely to have hurt operating profits in the quarter. R&D expenses are also expected to have increased due to higher costs for early and late-stage pipeline portfolios.
Costs related to Lilly’s several M&A deals that closed in the quarter are likely to have raised operating costs and lowered earnings growth in the quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Lilly’s stock.
LLY’s Price Performance and Valuation
So far this year, LLY’s stock has risen 19.0%, while the industry has risen 17.2%.
LLY Stock Performance
Image Source: Zacks Investment Research
Lilly’s shares currently trade at 28.59 forward earnings, higher than 19.03 for the industry. However, the stock is trading below its 5-year mean of 34.60.
LLY Stock Valuation
Image Source: Zacks Investment Research
Our Investment Thesis on LLY Stock
Lilly's biggest strength is its dominance in the rapidly expanding obesity and diabetes markets. Its blockbuster drugs, Mounjaro and Zepbound, have become some of the fastest-growing medicines in pharmaceutical history, gaining from enormous global demand for GLP-1 therapies. These therapies account for around 65% of the company’s total revenues and have become key top-line drivers for Lilly, with demand rising rapidly.
Foundayo can prove to be a commercial game-changer for Lilly. Foundayo's launch uptake has been encouraging as Lilly expands physician engagement and direct-to-consumer promotion in the United States.
To maintain leadership in the GLP-1 market, Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates. Retatrutide is one of Lilly’s most important late-stage pipeline candidates, targeting GLP-1, GIP and glucagon pathways and potentially delivering greater weight loss and broader metabolic benefits than current therapies. With late-stage studies spanning obesity, type II diabetes, obstructive sleep apnea (OSA) and other indications, Lilly plans to seek FDA approval in the first quarter of 2027, potentially creating another multibillion-dollar growth driver.
Lilly’s growth story is also increasingly diversifying beyond its GLP-1 franchise, with newer therapies such as Omvoh, Jaypirca, Ebglyss, Kisunla and Inluriyo gaining traction across multiple therapeutic areas. These products are becoming meaningful growth contributors.
The company has also embarked on an aggressive M&A spree in the past couple of years, acquiring biotech companies across oncology, neuroscience, cardiovascular disease, gene editing, inflammation, cell therapy and vaccines to diversify its long-term growth drivers beyond GLP-1 therapies. The company has announced around 10 small biotech M&A deals this year.
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Price is expected to continue to be a drag on top-line growth in the low- to mid-teens percentage in 2026. Rising competition in the GLP-1 diabetes/obesity market is a key headwind. Also, sales of late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat to down in 2026. Competition in the obesity market is heating up. While Lilly and Novo Nordisk currently dominate this space, smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.
Stay Invested in LLY’s Stock
Lilly remains one of the most compelling growth stories in the pharmaceutical industry, supported by its significant price appreciation, dominant position in the rapidly expanding obesity and diabetes markets, a diversified late-stage pipeline and strong financial performance. Investors should stay invested in this stock, regardless of how the third-quarter results play out.
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Buy, Sell or Hold LLY Stock? Key Factors to Watch Ahead of Q3 Earnings
Key Takeaways
Eli Lilly and Company (LLY - Free Report) will report its third-quarter 2026 earnings on Oct. 29, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $22.11 billion and $5.38 per share, respectively. Earnings estimates for 2026 have declined from $36.66 per share to $33.22 per share over the past 30 days.
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 21.25%, on average. In the last reported quarter, the company delivered a positive earnings surprise of 39.43%, as seen in the chart below.
LLY’s Earnings Surprise History
What Does Our Model Say for Lilly?
Lilly has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping LLY’s Upcoming Results
In the third quarter, like the past few quarters, the key drivers of Lilly’s top-line growth are likely to have been its popular GLP-1 drugs, diabetes drug Mounjaro and obesity drug Zepbound, driven by high demand trends, partially offset by lower pricing.
The Zacks Consensus Estimate for Mounjaro and Zepbound is pegged at $10.1 billion and $5.1 billion, respectively.
Lilly’s newly launched once-daily oral GLP-1 pill, Foundayo (orforglipron), generated $98 million in second-quarter sales following its April launch. Sales are expected to have been higher in the third quarter.
Rival Novo Nordisk (NVO - Free Report) gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026. Investors will be keen to know how NVO’s obesity pill affected Foundayo’s market share in the quarter.
Beyond Mounjaro and Zepbound, Lilly’s new products, Jaypirca, Ebglyss, Kisunla, Inluriyo and Omvoh are also likely to have contributed significantly to sales growth.
Other drugs like Olumiant and Trulicity are likely to have provided top-line support in the third quarter. However, sales of Verzenio and Emgality declined in the second quarter while Taltz and Cyramza rose only 1%. It remains to be seen if their sales improve in the third quarter.
Jardiance’s sales in the second quarter included a $250 million sales-based milestone associated with Lilly’s collaboration with Boehringer Ingelheim, which is likely to be missing in the third quarter.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $816 million, $918.0 million, $1.54 billion, $866.0 million, $274.0 million and $175.0 million, respectively.
While volumes are expected to have increased for most drugs, lower realized prices (including U.S. Part D changes) are likely to have continued to hurt sales of most drugs, including Mounjaro and Zepbound.
Sales of most established drugs like Forteo, Humalog and Humulin are likely to have declined in the quarter.
Overall, Lilly expects second-half sales growth to be slower than in the first half, as the U.S. rebate/discount estimate adjustments that benefited first-half sales are not expected to recur in the second half. Moreover, the second half faces tougher comparisons from prior-year international launches and normal vacation seasonality in Europe. Moreover, U.S. diabetes has also historically shown fourth-quarter seasonality. Due to these factors, second-half percentage growth may appear to decelerate, though Lilly expects significant absolute-dollar growth in the second half.
Higher marketing, selling and administrative expenses to support the launch of new products and indications are likely to have hurt operating profits in the quarter. R&D expenses are also expected to have increased due to higher costs for early and late-stage pipeline portfolios.
Costs related to Lilly’s several M&A deals that closed in the quarter are likely to have raised operating costs and lowered earnings growth in the quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Lilly’s stock.
LLY’s Price Performance and Valuation
So far this year, LLY’s stock has risen 19.0%, while the industry has risen 17.2%.
LLY Stock Performance
Lilly’s shares currently trade at 28.59 forward earnings, higher than 19.03 for the industry. However, the stock is trading below its 5-year mean of 34.60.
LLY Stock Valuation
Our Investment Thesis on LLY Stock
Lilly's biggest strength is its dominance in the rapidly expanding obesity and diabetes markets. Its blockbuster drugs, Mounjaro and Zepbound, have become some of the fastest-growing medicines in pharmaceutical history, gaining from enormous global demand for GLP-1 therapies. These therapies account for around 65% of the company’s total revenues and have become key top-line drivers for Lilly, with demand rising rapidly.
Foundayo can prove to be a commercial game-changer for Lilly. Foundayo's launch uptake has been encouraging as Lilly expands physician engagement and direct-to-consumer promotion in the United States.
To maintain leadership in the GLP-1 market, Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates. Retatrutide is one of Lilly’s most important late-stage pipeline candidates, targeting GLP-1, GIP and glucagon pathways and potentially delivering greater weight loss and broader metabolic benefits than current therapies. With late-stage studies spanning obesity, type II diabetes, obstructive sleep apnea (OSA) and other indications, Lilly plans to seek FDA approval in the first quarter of 2027, potentially creating another multibillion-dollar growth driver.
Lilly’s growth story is also increasingly diversifying beyond its GLP-1 franchise, with newer therapies such as Omvoh, Jaypirca, Ebglyss, Kisunla and Inluriyo gaining traction across multiple therapeutic areas. These products are becoming meaningful growth contributors.
The company has also embarked on an aggressive M&A spree in the past couple of years, acquiring biotech companies across oncology, neuroscience, cardiovascular disease, gene editing, inflammation, cell therapy and vaccines to diversify its long-term growth drivers beyond GLP-1 therapies. The company has announced around 10 small biotech M&A deals this year.
Lilly has its share of problems. Prices of most of Lilly’s products are declining in the United States. Price is expected to continue to be a drag on top-line growth in the low- to mid-teens percentage in 2026. Rising competition in the GLP-1 diabetes/obesity market is a key headwind. Also, sales of late-life cycle products like Trulicity, Taltz and Verzenio are expected to be flat to down in 2026. Competition in the obesity market is heating up. While Lilly and Novo Nordisk currently dominate this space, smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.
Stay Invested in LLY’s Stock
Lilly remains one of the most compelling growth stories in the pharmaceutical industry, supported by its significant price appreciation, dominant position in the rapidly expanding obesity and diabetes markets, a diversified late-stage pipeline and strong financial performance. Investors should stay invested in this stock, regardless of how the third-quarter results play out.