Eli Lilly (NYSE: LLY) said on Oct. 28, 2026 that its experimental drug retatrutide beat Ozempic at its highest approved dose on blood sugar control and weight loss in a late-stage head-to-head diabetes trial. The theme is "next-generation obesity drugs": Lilly's current business is already large, and this result tests whether its pipeline can extend its cardiometabolic franchise. Lilly reports quarterly results on Oct. 29, 2026.
Figures are current as of Oct. 28-29, 2026. Financials cover the quarter ended June 30, 2026 (Q2 FY2026) unless stated.
Key facts
- Oct. 28, 2026: Lilly announced positive topline results from TRANSCEND-T2D-2, a head-to-head trial of retatrutide against Ozempic's highest approved dose in adults with type 2 diabetes. According to the release, retatrutide met its main goal and all key secondary goals.
- Oct. 28, 2026: LLY traded at 1288.78 USD on the latest quote (as of Oct. 28, 2026), up 0.54%. The 52-week range is 809.63-1321.21 USD. Market cap is $1.21T.
- Oct. 29, 2026: Next earnings date. Analysts expect EPS of 5.68 and revenue of $22.58B (estimates).
- Q2 FY2026 (ended June 30, 2026): Revenue was $22.97B, up 47.7% from the year-ago quarter. Net income was $7.09B, up 25.3%.
- Stock Expert AI MoonshotScore V2: 98.1 (Exceptional).
The report and the filing give different EPS figures for the same quarter. Check which basis your source uses before comparing it to an estimate.
What happened
The theme. GLP-1 drugs mimic gut hormones that control appetite and blood sugar. They began as diabetes treatments and became weight-loss treatments. Lilly's marketed products include Mounjaro and the newer pill Foundayo. Retatrutide is a different design. Per the company, it is a once-weekly injection that activates three hormone receptors (GIP, GLP-1 and glucagon) in a single molecule. It is still investigational and has no approval anywhere.
The result. In TRANSCEND-T2D-2, adults with type 2 diabetes who were not controlled on metformin took retatrutide at two dose levels or Ozempic at its highest approved dose. The trial was open-label, meaning patients and doctors knew which drug was given. According to the release, both retatrutide doses lowered A1C (the standard blood sugar measure) more than Ozempic, and participants lost more than double the weight. Retatrutide also showed larger improvements in some heart-risk markers, including non-HDL cholesterol, triglycerides and blood pressure.
Kenneth Custer, Lilly's head of cardiometabolic health, said head-to-head trials show patients and doctors how a potential new medicine compares with treatments available today. He said that, if approved, retatrutide "could shift the treatment paradigm" for type 2 diabetes, obesity and related conditions. The release calls this the sixth late-stage trial in which retatrutide has delivered strong efficacy.
The catch in the same release. The most common side effects were stomach-related, such as diarrhea, nausea and vomiting. Lilly said most were mild to moderate. More patients stopped treatment because of side effects on retatrutide than on Ozempic, and the higher retatrutide dose had the higher dropout rate. Lilly also said full data will come at a future medical meeting and in a peer-reviewed journal. Lilly is running another head-to-head trial against its own Mounjaro ingredient, tirzepatide, in obesity. That readout is still pending.
Why it matters for investors
The current business is already growing fast. Q2 FY2026 revenue of $22.97B beat the analyst estimate of $20.82B. Cardiometabolic Health, the diabetes and obesity group, produced $18.35B of that revenue. Oncology contributed $2.57B, Immunology $1.42B and Neuroscience $429.0M. By region, the United States contributed $14.41B, Europe $4.12B, China $941.0M and Japan $628.0M. Cardiometabolic Health made up most of the total, so one product family drives most of the story. Retatrutide matters because it could extend that franchise.
Margins and cash flow in a five-quarter view. The table shows what changed in the latest quarter.
| Quarter ended | Revenue | Gross margin | Operating margin | Free cash flow | |---|---|---|---|---| | June 30, 2025 | $15.56B | 84.3% | 45.1% | $1.28B | | Sept. 30, 2025 | $17.60B | 82.9% | 47.6% | $8.61B | | Dec. 31, 2025 | $19.29B | 82.5% | 46.6% | $677.9M | | March 31, 2026 | $19.80B | 81.9% | 49.4% | $3.01B | | June 30, 2026 | $22.97B | 85.8% | 54.2% | $7.76B |
The table shows two things. Revenue rose every quarter. Operating margin (the share of sales left after running costs) was highest in the latest quarter, and gross margin reversed a slide to reach its highest level of the period. Free cash flow, meaning cash from operations minus capital spending, is lumpy. It swung widely from quarter to quarter, so one quarter is a weak guide. Net income in the latest quarter, $7.09B, was lower than the $7.40B of the March 2026 quarter even though revenue was higher. The data here does not explain the gap.
The company also kept returning cash. In Q2 FY2026 it spent $1.60B on buybacks and $1.55B on dividends. Capital spending was $2.93B.
Valuation versus peers. LLY trades at a trailing P/E of 43.12, meaning the price is that multiple of the last 12 months' earnings. Price/sales is 15.23 and EV/EBITDA is 29.08. For comparison, Amgen's P/E is 27.86, Johnson & Johnson's is 41.09, AstraZeneca's is 25.61 and AbbVie's is 80.67. AbbVie trades at a higher multiple than LLY. LLY's net margin of 33.5% is higher than all four peers: Amgen's 22.9%, Johnson & Johnson's 16.2%, AstraZeneca's 17.0% and AbbVie's 9.8%. In other words, LLY's multiple is above three of the four peers, and it converts more of its sales into profit than any of them. The dividend yield is 0.5%.
Analysts and our score. Of 45 analyst ratings, 33 are buy, 9 are hold and 3 are sell, with a consensus of "Buy". Analyst price targets average 1359.31 USD and the median is 1388.00 USD. The high is 1500.00 USD and the low is 940.00 USD. These are analyst views, not ours. Recent rating actions in October included Leerink Partners, RBC Capital, Cantor Fitzgerald and Morgan Stanley, which each maintained positive ratings.
Our MoonshotScore V2 is 98.1 (Exceptional). Growth (100), quality (98) and momentum (89) are the strong pillars, measured against other companies in the sector. Safety (69) is middling and valuation (36) is the weak area. That matches the numbers above: very strong fundamentals, with a price that already reflects a lot of that.
What could go wrong
- Trial results are not approvals. Lilly itself warned that future results may differ, that safety and effectiveness are unproven, and that regulators may not approve retatrutide.
- Tolerability. Higher dropout rates from side effects on retatrutide could shape how doctors use it.
- Valuation. FMP's discounted cash flow model, a model estimate and not a forecast, gives 700.67 USD per share, well below the current price. Models like this depend heavily on their assumptions, but the gap shows how much growth is already expected. The lowest analyst target, 940.00 USD, is also below the current price.
- Balance sheet. Total debt is $54.91B against cash and short-term investments of $8.95B, for net debt of $46.02B. Debt/equity is 1.62. Financial strength scores are still solid: Piotroski 8 out of 9 and Altman Z 8.72.
- Insiders. In the 90 days covered by FMP's filings data, there were 0 open-market insider purchases and 3 sales. Older filings in that window may be missing.
What to watch next
- Oct. 29, 2026 earnings. Compare results with the estimates of 5.68 EPS and $22.58B revenue. Listen for what management says about drivers and guidance, and any comment on retatrutide timing.
- Full TRANSCEND-T2D-2 data. Look for the complete safety picture and discontinuation details when published.
- The tirzepatide head-to-head. That trial compares retatrutide with Lilly's own marketed drug.
- Coming quarters. Analysts expect revenue of $22.83B (range $21.84B-$24.09B) and EPS of 10.13 for the period ending March 30, 2027. For the period ending June 30, 2027, they expect revenue of $25.47B (range $24.37B-$26.88B) and EPS of 11.63. Each is a consensus of 8 analysts.
Frequently asked questions
Q: What did Eli Lilly announce about retatrutide on Oct. 28, 2026?
Lilly said retatrutide beat Ozempic's highest approved dose on blood sugar reduction and weight loss in a late-stage head-to-head trial in adults with type 2 diabetes. According to the release, it met the primary and all key secondary goals. Side effects were mostly stomach-related, and more patients stopped retatrutide because of them than stopped Ozempic. The drug is not approved anywhere.
Q: Is Eli Lilly stock expensive compared with other drugmakers?
On trailing earnings it is at a premium to three of the four peers FMP lists. LLY's P/E is 43.12, versus 27.86 for Amgen, 41.09 for Johnson & Johnson and 25.61 for AstraZeneca. AbbVie is the exception, at 80.67, a higher multiple than LLY's. Lilly's net margin of 33.5% is higher than all four peers, which is part of why the market pays more. Our MoonshotScore valuation pillar is the weakest at 36. This is a description of the data, not a recommendation.
Q: When does Eli Lilly report earnings, and what do analysts expect?
Lilly reports on Oct. 29, 2026. Analysts expect EPS of 5.68 and revenue of $22.58B for the quarter. In the prior quarter, ended June 30, 2026, revenue was $22.97B against an estimate of $20.82B.
This is educational content, not investment advice. Past performance does not guarantee future results.