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Investing.com - Eli Lilly (NYSE:LLY) shares fell 14% on Thursday to $625.65, wiping nearly $100 billion from its market capitalization despite reporting second-quarter earnings that exceeded expectations. According to InvestingPro data, the stock’s RSI suggests oversold conditions, while the company maintains strong fundamentals with an impressive 82.64% gross profit margin.
The pharmaceutical giant posted substantial beats on both revenue and earnings per share in its Q2 2025 results and raised its full-year guidance, with revenue growth reaching 36.83% over the last twelve months. However, investor reaction was dominated by disappointment over clinical trial data for its weight loss drug candidate Orforglipron from the ATTAIN-1 study. InvestingPro analysis indicates the stock is currently trading below its Fair Value, with 7 analysts recently revising earnings estimates upward.
Bernstein SocGen Group maintained its Outperform rating and $1,100 price target on Eli Lilly following the results, describing the steep stock decline as "overblown" and a "clear buying opportunity." The firm suggested a 5% drop would have been more proportionate given the offsetting factors of the Orforglipron data and the raised annual outlook. This aligns with the broader analyst consensus of 1.76 (Buy) tracked by InvestingPro, which offers comprehensive analysis through its Pro Research Report, available for over 1,400 US stocks.
The research firm emphasized that investor expectations for Orforglipron differed from those of physicians and patients, and expressed continued confidence in the drug’s market-expanding potential. Bernstein raised its fiscal year 2025 revenue estimate by 3% to $62.2 billion and increased its earnings per share forecast to $22.84 from $22.07.
Bernstein particularly recommended the stock for investors with a horizon extending to the second half of 2026, when the company’s valuation may focus more on quarterly financial results rather than clinical trial outcomes.
In other recent news, Eli Lilly reported its second-quarter 2025 earnings, exceeding Wall Street expectations with an earnings per share of $6.31, compared to the projected $5.59. The company’s revenue also surpassed forecasts, reaching $15.56 billion against the anticipated $14.67 billion. Despite these strong financial results, concerns over clinical trial data for Eli Lilly’s obesity drug, orforglipron, have influenced analyst actions. UBS lowered its price target for the company to $895 from $1,050, maintaining a Buy rating due to concerns about the Phase 3 data overshadowing the company’s robust quarterly performance. Jefferies also reduced its price target to $905 from $1,057, following the release of topline data from the ATTAIN-1 72-week obesity trial, which showed an 11.2% absolute weight loss at the 36 mg dose. On a more positive note, JPMorgan reiterated its Overweight rating with a price target of $1,100, while Morgan Stanley (NYSE:MS) maintained its Overweight rating and $1,135 price target, citing the growth of the GLP-1 market. Morgan Stanley highlighted that the GLP-1 market is expanding beyond early adopters in the U.S. to larger global patient populations, projecting a peak obesity total addressable market of approximately $150 billion.
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