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Eli Lilly and Company LLY announced that its board of directors approved a new $15 billion share buyback plan. The earlier $5 billion stock repurchase plan ended in the fourth quarter of 2024.

The board also announced a 15% increase in its quarterly dividend for the first quarter of 2025 from $1.30 per share to $1.50 per share. The dividend will be paid out on March 10 next year to shareholders of record as of Feb. 14. The quarterly dividend adds up to an annual dividend of around $6.00 per share, which represents a dividend yield of around 0.75%.

Lilly’s stock has risen 37.9% so far this year compared with an increase of 9.5% for the industry.

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The new buyback plan and the dividend increase were driven by the rapid sales and profit growth that Lilly has seen in the past couple of years.

LLY Seeing a Period of Rapid Growth

The stupendous success of Lilly’s tripeptide medicines, Mounjaro and Zepbound, has made it the largest drugmaker, with a market cap of more than $780 billion. Despite a short time on the market, Mounjaro and Zepbound, have become key top-line drivers for Lilly in 2024, with demand rising rapidly.

Lilly’s stock has gone up by 565% in the past five years, mainly due to its successful new drug launches, particularly Mounjaro and Zepbound, and its solid pipeline potential. Other than Mounjaro and Zepbound, Lilly has gained approvals for some other new drugs in the past couple of years. These include Omvoh for ulcerative colitis, BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia and Kisunla (donanemab) for early symptomatic Alzheimer's disease. All these new drugs should continue to support Lilly’s top-line growth in future quarters.

Though Mounjaro and Zepbound’s sales were disappointing in the third quarter, Lilly is expanding its manufacturing capacity for Mounjaro and Zepbound in order to balance demand and supply. Since 2020, Lilly has committed more than $23 billion for manufacturing capacity for Zepbound and Mounjaro in the United States and Europe. The potential launch of these medicines for additional indications like obstructive sleep apnea, heart failure, cardiovascular risks and metabolic dysfunction-associated steatohepatitis and in new geographies can further drive growth. Lilly is also investing broadly in the popular obesity space and has 11 new molecules currently in clinical development.

LLY’s Zacks Rank and Stocks to Consider

Lilly has a Zacks Rank #3 (Hold) currently. Some better-ranked drugmakers are Pfizer PFE, Gilead GILD and Exelixis EXEL, with a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Eli Lilly and Company Price and Consensus

Eli Lilly and Company price-consensus-chart | Eli Lilly and Company Quote

Estimates for Pfizer’s 2024 earnings have risen from $2.62 to $2.91 per share over the past 60 days. For 2025, earnings estimates have risen from $2.84 to $2.91 per share over the same timeframe. Year to date, Pfizer’s stock has declined 9.4%.

Pfizer beat estimates in each of the last four quarters, delivering an average earnings surprise of 74.50%.

Estimates for Gilead’s 2024 earnings per share have increased from $3.79 to $4.32 over the past 60 days, while those for 2025 have risen from $7.24 to $7.38 per share. Gilead’s shares have risen 11.9% year to date.

Gilead beat estimates in three of the last four quarters while missing in one, delivering an average earnings surprise of 15.46%.

The Zacks Consensus Estimate for Exelixis’ earnings has risen from $1.83 to $1.93 per share for 2024 over the past 60 days, while that for 2025 has risen from $1.85 to $2.00 per share over the same timeframe. Exelixis’ shares have risen 46.6% year to date.

Exelixis beat estimates in three of the last four quarters while missing in one, delivering an average earnings surprise of 26.52%.

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Pfizer Inc. (PFE) : Free Stock Analysis Report

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