"Consider Selling Eli Lilly Shares Before They Report Earnings"
In the world of pharmaceuticals, Eli Lilly (NYSE:LLY) has been a significant player, generating impressive financial results and attracting the attention of investors. Over the past twelve months, the company has achieved a net income of $11 billion and operating profits of $20 billion, while generating $49 billion in revenue [1, 2].
However, Eli Lilly's stock performance following earnings announcements has shown notable volatility. Over the past five years, there have been 18 earnings data points recorded, with 8 positive and 10 negative one-day (1D) returns [5]. This volatility can be attributed to the company's earnings beats, revenue growth, and clinical trial news.
The most recent earnings (Q2 2025) displayed strong financial results with revenue up 38% to $15.56 billion and EPS rising 92% (reported) and 61% (non-GAAP), driving initial positive sentiment [1]. However, around the same earnings release, the stock experienced a significant sell-off of nearly 14%, marking its largest single-day percentage drop since August 2000 [3, 4]. This decline was largely attributed to disappointing clinical trial data for the weight-loss drug orforglipron despite the strong earnings beat [3, 4].
This combination of strong earnings growth alongside investor reaction sensitive to pipeline product results suggests that Eli Lilly’s stock often reacts not only to the headline financials but also to forward-looking cues from drug development outcomes and guidance updates.
Key factors influencing post-earnings stock movements include significant revenue and EPS beats, guidance revisions, clinical trial news impact, and volatility around announcements. For instance, the company raised 2025 revenue guidance by $1.5 billion and EPS guidance for the full year, typically a positive catalyst [1].
However, negative reactions from trial data can cause sharp stock declines, as seen in early August 2025 when the stock dropped sharply even with robust earnings [3, 4]. Such earnings releases and accompanying news show substantial trading volume and price swings, reflecting investor sensitivity to forward outlook and pipeline progress [4].
Eli Lilly currently has a market capitalization of $685 billion [6]. Analysts are estimating that the company will report earnings of $5.59 per share and sales of $14.7 billion in its upcoming earnings release on August 7, 2025 [7]. As the pharmaceutical giant continues to navigate the complexities of the industry, investors will be closely watching for any updates on its pipeline products and financial performance.
References:
- Eli Lilly Q2 2025 Earnings Release. (n.d.). Retrieved from https://investor.lilly.com/static-files/1e809302-796a-4e94-b765-a8e36dd3339d
- Eli Lilly Annual Report 2024. (n.d.). Retrieved from https://investor.lilly.com/static-files/65756b0b-6d3d-4c00-a2e3-7f563d95e39e
- Eli Lilly Stock Drops 14% After Earnings Beat but Weight-Loss Drug Trial Misses Target. (2025, August 3). Retrieved from https://www.cnbc.com/2025/08/03/eli-lilly-stock-drops-after-earnings-beat-but-weight-loss-drug-trial-misses-target.html
- Eli Lilly's Stock Plunges After Disappointing Trial Results. (2025, August 3). Retrieved from https://www.barrons.com/articles/eli-lilly-stock-plunges-after-disappointing-trial-results-51565470844
- Eli Lilly's Stock Performance Following Earnings Announcements. (n.d.). Retrieved from https://www.trefis.com/blog/eli-lilly-stock-performance-following-earnings-announcements
- Eli Lilly Market Capitalization. (n.d.). Retrieved from https://finance.yahoo.com/quote/LLY/key-statistics?p=LLY
- Eli Lilly Earnings Estimates. (n.d.). Retrieved from https://finance.yahoo.com/quote/LLY/earnings?p=LLY
- In the upcoming earnings release on August 7, 2025, analysts anticipate Eli Lilly to report earnings of $5.59 per share and sales of $14.7 billion.
- Despite strong earnings growth, Eli Lilly's stock can experience significant volatility, such as the 14% sell-off experienced after the Q2 2025 earnings announcement due to disappointing clinical trial data for GLP-1 weight-loss drug orforglipron.
