Is Eli Lilly Stock a Portfolio Must-Have Pre-Q1 Earnings? (Revised)

Core Viewpoint - Eli Lilly and Company is set to report its first-quarter earnings on May 1, with sales and earnings estimates at $12.62 billion and$3.52 per share, respectively. However, earnings estimates for 2025 have seen a decline from $23.53 to$22.43 per share over the past month [1][4]. Earnings Performance - The company has had a mixed earnings performance, exceeding expectations in three of the last four quarters, with an average earnings surprise of 8.47% [2][3]. Earnings Estimates and Trends - Current earnings estimates for Q1, Q2, 2025, and 2026 are $3.52,$5.58, $22.43, and$31.15 per share, respectively. Notably, the earnings estimate for Q1 has decreased by 22.30% over the past month [1][4]. Factors Influencing Upcoming Results - Top-line growth in Q1 is expected to be driven by demand for FDA-approved tirzepatide medicines, specifically the diabetes drug Mounjaro and weight loss medicine Zepbound. However, sales of these drugs were below expectations in the latter half of 2024 due to slower growth and unfavorable channel dynamics [5][6]. Sales Estimates for Key Products - The Zacks Consensus Estimate for Mounjaro and Zepbound is $3.75 billion and$2.27 billion, respectively, while the company's estimates are $3.82 billion and$2.19 billion. Increased demand for other key growth drugs is also anticipated to support top-line growth [8][10]. Competitive Landscape - Sales of Trulicity are expected to decline due to competitive dynamics and lower realized prices in the U.S., with patient switches to Mounjaro impacting its performance [9][22]. The obesity market is becoming increasingly competitive, with several companies developing GLP-1-based candidates [23][24]. Stock Performance and Valuation - Lilly's stock has risen 14.8% year-to-date, outperforming the industry and the S&P 500 index. The stock is currently trading at a premium compared to the industry [13][16]. Investment Outlook - Despite challenges, including declining sales of key products and increasing competition, the company is viewed as having robust growth prospects, particularly with new product launches and expansions planned for 2025 [20][25].