Eli Lilly and Co. (NYSE:LLY) stock is trading higher on Friday, riding continued momentum after the company delivered better-than-expected third-quarter results and raised its guidance on Thursday.

The Numbers That Made Wall Street Look Up

Adjusted earnings came in at $7.48 per share, comfortably beating the analyst consensus of $6.50. Revenue climbed 39% year over year to $24.397 billion, topping the $22.61 billion consensus estimate.

The star of the show, as usual, was the obesity and diabetes franchise. Worldwide Mounjaro revenue surged 65% to $10.7 billion, while U.S. Zepbound revenue jumped 48% to $5.3 billion. Those are not small numbers. They are the kind of numbers that make analysts reach for their calculators and, apparently, their price-target spreadsheets.

Analysts Rush to Raise Price Targets

After the upbeat earnings, several analysts raised their price forecasts on Eli Lilly. Scotiabank analyst Louise Chen maintained a Sector Outperform rating while lifting her price forecast from $1,300 to $1,605, citing increased 2026 and 2027 earnings estimates and multiple expansion.

"We think this is deserved because LLY's execution continues to outpace Street expectations," Chen wrote on Thursday.

She added: "LLY will maintain its leadership in obesity for the foreseeable future with potential next-generation products including retatrutide, eloralintide and others, while it continues to acquire new products/platforms."

Other analysts followed suit:

• Truist Securities reiterated a Buy rating and raised its price forecast from $1,376 to $1,612.
• RBC Capital maintained an Outperform rating and lifted its price forecast from $1,500 to $1,600.
• Argus Research maintained a Buy rating and raised its price forecast from $1,300 to $1,550.
• Wells Fargo maintained an Overweight rating but increased its price forecast from $1,330 to $1,500.

Guidance: A Tale of Two Numbers

Eli Lilly raised its 2026 sales guidance from $85 billion-$87 billion to $91 billion-$92 billion, well above the consensus of $88.848 billion. That is a big jump, and it tells you management sees plenty of runway ahead.

But the company lowered its 2026 adjusted earnings guidance from $35.50-$36.50 per share to $35.00-$36.00 per share, compared with the consensus of $34.04. The updated earnings guidance reflects acquired IPR&D charges from recent business development activity, including AtaiBeckley and Merida Biosciences. In other words, Lilly is spending money to buy future growth, and that shows up in the near-term earnings number.

The CEO's Take on Middle-Income Demand and Medicare

During Lilly's third-quarter earnings call, CEO David Ricks said the company was assessing whether "more middle-income households would be interested in improving their health and losing weight at scale."

He said that factor, along with uptake of the Medicare GLP-1 Bridge program, "turned out to be positive for us," with both factors contributing to roughly a $10 billion improvement from Lilly's initial guidance. That is a $10 billion surprise, and it helps explain why the stock is doing what it is doing.

LLY Price Action: Eli Lilly shares were up 3.60% at $1423.15 at the time of publication on Friday. The stock is trading at a new 52-week high, according to market data.