Eli Lilly: A Calculated Advance

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Last September, when we last dared to glance at the affairs of Eli Lilly (LLY +0.58%), the stock was merely…present. A modest performer, if you will. We suggested, with a certain confidence, that any investor of sound mind and long-term vision would do well to acquire a share. Since then, the company has staged a rally, a climb of over 36% – a performance that would make a circus acrobat envious. Now, the question isn’t whether we were right, but whether the opportunity still exists, or if we’ve merely witnessed a spectacular, yet fleeting, balloon ascent.

The answer, after a careful examination of the accounts and a healthy dose of skepticism, is a resounding ‘yes.’ Though one must always be wary of a stock that appears to defy gravity. The current situation at Eli Lilly isn’t merely growth; it’s a carefully orchestrated advance, a strategic repositioning in the burgeoning fields of weight management and diabetes care. A most profitable venture, naturally.

The Third Quarter: A Triumph of Chemistry and Commerce

Our previous assessment coincided with the release of the second-quarter earnings, which already hinted at a promising trajectory. A 38% increase in revenue, a 92% surge in earnings per share…numbers that would ordinarily elicit a polite nod of approval. But the third quarter? The third quarter was a veritable explosion of profitability. It was as if the company had discovered the alchemical formula for turning water into gold – or, more accurately, transforming glucose into greenbacks.

Revenue for the quarter reached $17.6 billion – a 54% year-over-year increase. Earnings per share? A monumental leap from $1.07 to $6.21. Such figures aren’t merely impressive; they’re a testament to the transformative power of a well-positioned product portfolio. One might even suspect a touch of magic, but we assure you, it’s simply astute business acumen…and a few cleverly formulated compounds. Net income, through the first three quarters of 2025, enjoyed a 127% increase – a statistic that would make even the most hardened accountant crack a smile.

The driving force behind this surge? The company’s weight loss and diabetes treatments, naturally. Mounjaro, their flagship drug, saw sales climb by 94% – reaching $15.55 billion. A rare feat for a product already operating at blockbuster scale. One suspects the company is printing money at this point, though they would never admit it. And Zepbound, its weight loss-focused sister medication, is gaining momentum even faster, with sales jumping from just over $3 billion to $9.28 billion. It’s a veritable gold rush, and Eli Lilly is holding the pickaxe.

These figures aren’t indicative of a temporary craze, a fleeting fad. They demonstrate a strategic consolidation of power in two of the most vital – and rapidly expanding – sectors of modern healthcare. A most advantageous position, wouldn’t you agree?

Guidance and the Art of Expectation Management

Positive results are encouraging, of course, but forward guidance often reveals the true intentions of a company. And Eli Lilly delivered – raising its full-year 2025 revenue guidance to a range of $63 billion to $63.5 billion. Even at the lower end, that represents a nearly 40% annual growth rate. A figure that would make a state-sponsored economic plan blush.

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Such growth is exceptionally rare among companies of this magnitude. Most megacap firms would be thrilled with high-single-digit or low-double-digit expansion. Eli Lilly, by contrast, is operating in a different league entirely – driven by category-defining drugs and, shall we say, a certain flair for the dramatic.

A Calculated Risk, or a Prudent Investment?

After a 36% rally, it’s natural to question whether the opportunity has passed. Eli Lilly isn’t a cheap stock by traditional metrics, but elite businesses with sustained growth often command a premium. The question isn’t about affordability, but about potential. Can the company continue to grow into its valuation? Current trends suggest it can.

The company projects full-year earnings of $21.8 to $22.50 per share. Conservatively, that gives the stock a P/E ratio of 49.5. But with explosive revenue growth, dominant products in weight loss and diabetes, and guidance pointing to nearly 40% annual revenue expansion, Eli Lilly still has momentum firmly on its side.

If the company delivers anywhere close to its updated guidance, today’s pricing may appear remarkably modest in hindsight for long-term investors. It’s a calculated risk, certainly, but one that a discerning investor – one who appreciates a well-executed scheme – would be wise to consider. After all, a little bit of audacity, a touch of foresight, and a healthy dose of skepticism can go a long way in the world of finance.

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2026-01-27 19:02