Eli Lilly and Co (NYSE:LLY) on Thursday reported first-quarter earnings and lowered its 2025 guidance.

The U.S. pharma giant reported January-March revenue of $12.73 billion, up 45% year over year and almost in line with the consensus of $12.67 billion. That was driven by a 53% increase in volume, partially offset by a 6% hit from lower realized prices and a 2% unfavorable impact of foreign exchange rates.

Key Products revenue grew by $4.09 billion to $7.52 billion in Q1 2025, led by Mounjaro and Zepbound.

Eli Lilly reaffirmed its fiscal year 2025 sales guidance of $58 billion—$61 billion versus a market consensus of $59.52 billion and $45.04 billion in 2024.

But it lowered the 2025 adjusted EPS outlook from $22.50-$24.00 to $20.78-$22.28, compared to the street consensus of $21.93, to reflect the impact of the Q1 2025 acquired IPR&D.

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Goldman Sachs analysts wrote in a note that Eli Lilly’s “decent set of 1Q25 results was overshadowed by news of a formulary change announcement by CVS Caremark that it is dropping the company’s Zepbound in favor of Novo Nordisk A/S‘ (NYSE:NVO) Wegovy.”

“This has raised investor questions about pricing dynamics across the anti-obesity medication market. The combined price action in Eli Lilly and Nov Nordisk suggests investors are pondering smaller obesity TAM assumptions on pricing concerns. We believe these concerns are excessive,” Goldman analyst Asad Haider wrote.

Eli Lilly’s tirzepatide franchise strength, along with the robust orforglipron program for oral obesity, would have been rewarded had it not been for the CVS announcement, according to the Wall Street firm.

Haider maintains a buy rating on Eli Lilly and views the company as a leader in the anti-obesity market. According to the analyst, “sharp selloffs in LLY shares have presented a buying opportunity.”

Goldman Sachs lowered its Eli Lilly price target from $888 to $883 on Friday, reflecting PBM-related uncertainty.

BofA Securities on Friday noted Eli Lilly says it's reluctant to take part in “one-on-one” negotiations with insurers—where only one drug is chosen and companies are forced to compete head-to-head. The company believes it doesn't need to do that because Zepbound is a superior product.

“We think this whole CVS issue probably got more attention than it deserved…The CVS news does not mark a major, new negative trend, but does reflect the reality that no company ever has all payers locked up,” BofA Securities analyst Tim Anderson wrote.

BofA reiterates the Buy rating with a price target of $1,000.

Price Action: LLY stock is up 4.10% at $826.64 at the last check Friday.

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