Eli Lilly and Co. (NYSE:LLY) is set to report fourth-quarter earnings on Feb. 4 before the opening bell, with Wall Street forecasting a significant revenue beat driven by its blockbuster weight-loss and diabetes drugs.

While topline expectations are high, surging research costs could challenge the company's ability to hit ambitious profit targets.

Revenue Expectations Vs. Guidance

Analysts project fourth-quarter revenue of $17.90 billion, as per Benzinga, a figure that exceeds the implied ceiling of management's own guidance.

During the third quarter, Lilly raised its full-year 2025 revenue outlook to a range of $63.0 billion to $63.5 billion, implying a fourth-quarter cap of approximately $17.6 billion.

The optimism stems from the continued dominance of Mounjaro and Zepbound. In the previous quarter, CEO David A. Ricks noted, “Lilly delivered another strong quarter, with 54% revenue growth year-over-year driven by continued demand for our incretin portfolio”.

Investors will be watching to see if volume growth can continue to offset pricing pressures, which saw U.S. realized prices decline in the third quarter.

The Cost Of Innovation

Profitability remains a key battleground. The consensus earnings per share (EPS) estimate stands at $6.96, positioning it near the upper end of the company's implied guidance range.

However, aggressive reinvestment in the pipeline could weigh on margins. In the third quarter alone, research and development expenses jumped 27%.

CFO Lucas Montarce highlighted this accelerated activity during the last earnings call, stating, “We have initiated 16 new phase three programs since the start of 2024 and continue to advance our pipeline”.

The ‘Oral Opportunity’

Beyond the numbers, Wall Street is focused on Lilly's 2026 strategic pivot. Analysts at Bernstein emphasize that “2026 is all about the oral opportunity,” referring to the potential launch of orforglipron, an oral GLP-1 drug.

Similarly, BMO Capital points to “Incretin growth outlook supported by broader access and orforglipron launch potential” as a critical driver for the stock moving forward.

LLY Underperforms In 2026

Shares of LLY have declined by 3.35% year-to-date, and it was up just 0.25% over the last month. The stock has returned 35.78% over the last six months and 28.84% over the year.

On Monday, the stock closed 0.67% higher at $1,044.13 per share, and it was down 0.58% in premarket on Tuesday.

It maintains a stronger price trend over the medium and long terms but a weak trend in the short term, with a solid quality ranking, as per Benzinga's Edge Stock Rankings.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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