Eli Lilly Booms, Then Busts: Stellar Guidance vs Hims Undercut

Key Points

• Eli Lilly shares gained mightily after the company released its latest earnings report, with 2026 guidance coming in well past expectations.
• However, HIMS stoked fears around LLY's oral GLP-1 potential the next day, wiping out much of the stock's gain.
• After Lilly's earnings, updated price targets imply significant upside ahead for the stock.

In its latest earnings report, Eli Lilly and Company NYSE: LLY once again showed why it has become by far one of the world’s most valuable healthcare stocks. Year-to-date, Eli Lilly’s market capitalization exceeds $900 billion. This makes Lilly worth over $300 billion more than the next largest name in the sector, Johnson & Johnson NYSE: JNJ.

Shares surged by over 10% on Feb. 4 as markets reacted to Lilly’s earnings. However, the stock was alarmingly whipsawed the next day, tanking by almost 8% after an announcement from Hims & Hers Health NYSE: HIMS. Despite this noise, with strong growth expected in 2026, and a potential blockbuster drug on the way, Eli Lilly remains hard to bet against.

Lilly Provides Stunning 2026 Guidance, Catapulting Shares

Lilly’s Q4 2025 results were highly impressive. The company saw sales rise by 43% to $19.3 billion, handily exceeding expectations of $17.9 billion, which implied 33% growth. Adjusted earnings per share (EPS) grew by 42% to $7.54, beating estimates of $7.48, which called for 41% growth.

However, the standout headline was Lilly’s 2026 guidance. Based on midpoint numbers, the firm expects full-year revenue of $81.5 billion and adjusted EPS of $34.25. Respectively, the figures imply growth of 25% and 41%. This blew past estimates, with analysts forecasting revenue growth of 19% and adjusted EPS growth of 36%.

Meanwhile, Lilly’s top competitor Novo Nordisk A/S NYSE: NVO forecasted sales to decline by 5% to 13% in 2026, encapsulating the divergence in performance between the two companies. Lilly’s share of the U.S. incretin market, a catch-all term for GLP-1 and similar drugs, continues to grow. At the end of 2025, its market share stood at over 60%, compared to Novo’s 39%. Just one year ago, the firms held a nearly equal share of the market.

This shift is not particularly surprising. A 2025 study showed that Lilly’s injectable weight loss and diabetes drug tirzepatide induces nearly 50% more weight loss than Novo’s competing product, injectable semaglutide. This clearly puts Lilly’s drug in a favorable position when it comes to doctors prescribing it.

HIMS Rains on LLY’s Parade, Introducing Low-Cost Oral Copycat

Oral medications are emerging as the next battleground on which Lilly and Novo will compete. Novo’s oral semaglutide has already received approval from the U.S. Food and Drug Administration. Pending approval, Lilly plans to launch its oral medication, orforglipron, in the United States during Q2 2026. It also hopes to launch the drug in most international markets during 2027. Many see orforglipron as Lilly’s next drug with blockbuster potential. This stems from its ability to reach new patients with needle fear, as well as helping patients maintain their weight loss after ending injectable treatments.

However, Hims & Hers Health is attempting to throw a wrench in Lilly’s plans. On Feb. 5, the company announced that it would start selling copycat versions of Novo’s oral semaglutide. Hims plans to offer the drug at $49 for the first month, and $99 thereafter. This is $100 less than the monthly rates that Novo charges. It is also significantly lower than the $149 to $399 at which Lilly plans to offer orforglipron directly to consumers, depending on dosage. This news caused Lilly's shares to drop 7.8% on Feb. 5.

The market not only fears that Hims's lower pricing could hurt orforglipron demand, but that Hims may also try to produce a copycat version of Lilly’s drug. While uncertainty remains around how this could affect the oral market, there is evidence that Lilly can withstand Hims's maneuver.

UBS Securities analyst Michael Yee estimates that there have been around 1 million prescriptions written for compounded GLP-1s. Meanwhile, doctors have written approximately 100 million across Novo and Lilly’s branded GLP-1 franchises. This shows that while compounded GLP-1 demand is real, it represents a tiny piece of the overall pie. Thus, while Hims could certainly be a nuisance, its ability to meaningfully hinder orforglipron sales growth is highly questionable.

Updated Targets Eye 25% Upside in LLY Shares

With the potential launch of orforglipron quickly approaching, and the company’s injectable drugs seeing robust demand, the outlook for Eli Lilly shares remains positive. The MarketBeat consensus price target for LLY is near $1,200, implying 18% upside potential. Notably, targets updated the day after Lilly’s earnings release average $1,273, suggesting that shares could gain by 25%.