What Happened?
Shares of global pharmaceutical company Eli Lilly (NYSE: LLY) jumped 3.1% in the afternoon session after the stock rebounded following a decline the previous week. The stock had dropped sharply the previous week after the company released its Q2 2025 earnings report. Although the company beat earnings and revenue expectations and raised its full-year guidance, the positive news was overshadowed by disappointing trial data for its oral weight-loss drug, orforglipron. The drug's trial results showed a weight loss of about 12%, which fell short of analyst expectations and the performance of some rival treatments. The current upward movement can be seen as a "buy the dip" opportunity as investors are likely re-evaluating the stock's long-term potential.
After the initial pop the shares cooled down to $642.63, up 2.8% from previous close.
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What Is The Market Telling Us
Eli Lilly’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 13.9% on the news that its oral weight-loss drug trial results disappointed investors, overshadowing an otherwise strong quarterly earnings report and guidance increase. The pharmaceutical company announced late-stage trial data for its oral weight-loss pill, orforglipron, which showed an average weight loss of 12.4%. This figure fell short of analyst expectations, which anticipated a result closer to 15%, and also trailed the effectiveness of a rival treatment from Novo Nordisk. This disappointing development overshadowed Eli Lilly's strong second-quarter financial report, where the company beat earnings estimates and raised its full-year sales and profit forecasts. Investors reacted to the perceived setback in the highly competitive weight-loss drug market, triggering the most significant single-day stock drop in over two decades.
Eli Lilly is down 17.4% since the beginning of the year, and at $642.63 per share, it is trading 33.1% below its 52-week high of $960.02 from August 2024. Investors who bought $1,000 worth of Eli Lilly’s shares 5 years ago would now be looking at an investment worth $4,266.
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