Eli Lilly’s shares slid 8% on Jan. 14, wiping out nearly all of the year-to-date gains. Despite this, the company still managed to grow its share price by 33% in 2024, outperforming the S&P 500 and Nasdaq Composite.
The cause of the recent sell-off lies in Lilly’s revised guidance for full-year sales. In October, management forecasted $45.4 billion to $46 billion in revenue, which was below prior expectations of $46.6 billion at the high end. However, this was not enough to deter investors from being optimistic about the company’s growth prospects.
What’s concerning is the specific guidance related to Lilly’s blockbuster GLP-1 drugs, Mounjaro and Zepbound. The expectation for fourth-quarter revenue from these treatments has decreased, leading some to question if demand is waning. However, this is a temporary issue, as record revenue is still expected from both weight loss treatments in the fourth quarter.
Lilly’s oncology business remains strong, and new medications approved for treating Alzheimer’s Disease and eczema are yet to reach scale. With 32% annual revenue growth predicted for 2025, it’s hard to justify panic-selling the stock.
Considering Lilly’s solid fundamentals, now is a great opportunity to buy the dip in this pharmaceutical powerhouse. Its depressed price action makes it an attractive investment opportunity.
Source: https://www.fool.com/investing/2025/01/19/should-you-buy-the-dip-in-eli-lilly-stock-right-no