Eli Lilly's blockbuster weight-loss and diabetes drugs are selling so well that analysts at RBC Capital Markets think the company will raise its full-year revenue forecast again when it reports third-quarter results on Oct. 29. The expected increase is roughly $2 billion, according to RBC, even as a new Medicare discount program trims prices on some products.
The drugs in question are Mounjaro, used for type 2 diabetes, and Zepbound, approved for weight loss. Both belong to the GLP-1 class of medicines, which mimic a hormone that regulates appetite and blood sugar. These drugs have become a major growth engine for Lilly, and demand has repeatedly outpaced supply.
Another guidance bump
RBC's projection suggests Lilly will raise its full-year revenue outlook for the third time this year. The company already lifted its guidance after the first and second quarters. Its most recent forecast called for $85 billion to $87 billion in 2025 revenue. Wall Street's consensus, as tracked by FactSet, is already higher at $88.7 billion, meaning investors have priced in another upward revision.
The expected $2 billion hike would bring Lilly's guidance closer to that consensus, but it may not fully close the gap. That could leave room for further upgrades later in the year if demand stays strong.
RBC's call comes as Lilly navigates the Medicare Bridge Program, a new initiative that allows certain Medicare beneficiaries to pay no more than $25 per month for some drugs, including Zepbound. While that program reduces the price Lilly receives per prescription, the sheer volume of sales appears to be more than making up for it.
Why this matters for investors
For everyday investors, the key takeaway is that Lilly's growth story remains intact, but the stock's valuation already reflects high expectations. Lilly is one of the largest pharmaceutical companies in the world, and its GLP-1 franchise has made it a favorite among growth investors. However, with a market value in the hundreds of billions, the stock trades at a premium to most drugmakers.
When a company repeatedly raises guidance, it can boost investor confidence and support the share price. But it also raises the bar for future performance. If Lilly eventually fails to beat expectations, the stock could be more vulnerable to a sell-off.
Investors should also watch how the Medicare Bridge Program affects Lilly's margins. While volume is strong, lower prices per prescription could squeeze profitability. Lilly has been expanding manufacturing capacity to meet demand, which involves significant capital spending. The company has said it expects to have more supply available in the second half of the year.
Broader market context
Lilly's performance is part of a larger trend in the pharmaceutical sector, where GLP-1 drugs are reshaping treatment for obesity and diabetes. Rival Novo Nordisk also sells similar medicines, and both companies are racing to expand production and develop next-generation versions.
The GLP-1 boom has also drawn attention from other industries, including food and beverage companies, which worry that weight-loss drugs could reduce consumer appetite for snacks and sugary drinks. That dynamic has made Lilly's earnings a closely watched event beyond just healthcare investors.
For those who own Lilly shares or are considering them, the upcoming earnings report will be a key moment. The company's ability to raise guidance again would signal that demand is still outpacing supply, a positive sign. But investors should also listen for any cautionary notes about pricing, competition, or production costs.
As always, it's important to remember that past performance doesn't guarantee future results. A single earnings report can move a stock sharply, but long-term investors should focus on the company's fundamentals and competitive position.
RBC's projection is just one analyst's view, and actual results could differ. Still, the fact that a major investment bank expects another guidance hike underscores how strong Lilly's momentum appears to be.
For more on how other companies are navigating their own earnings seasons, check out our look at Reckitt's steady growth outlook and TSMC's record quarter on AI chip demand.
