Shares of Eli Lilly hit a new record high Thursday after the drugmaker posted another strong quarter, driven by resilient momentum in its obesity drugs business. The figures continue to impress and consolidate the stock’s place in our portfolio. Third-quarter revenue rose 39% year-over-year to $24.4 billion, beating the LSEG consensus of $22.6 billion. Adjusted earnings per share (EPS) rose 6.6% from a year ago to $7.48, beating analysts’ expectations of $6.26, according to LSEG data. The modest annual growth in adjusted profit was due to a significant acquisition-related accounting charge recognized in the September quarter. That’s an easy thing to accept, because Lilly has an interest in channeling its windfall GLP-1 profits into potential growth drivers in the years to come. Adjusted gross margin for the September quarter came in at 84.4%, beating the consensus of 82.7%, according to FactSet. It also increased from 83.6% a year ago, an encouraging sign of profitability. Shares rose more than 6% on Thursday to around $1,370 each. The advance puts Lilly on track for one of its best sessions of the year and a new record close, surpassing its previous high of $1,306.69 on October 22. The stock — a major outperformer in recent years thanks to its booming GLP-1 business — entered Thursday up about 20% in 2026, ahead of the S&P 500’s 13% gain. Lilly stock had a rough few months to start the year, largely due to concerns over its obesity pill Foundayo, which suffered a delay in regulatory approval while rival Novo successfully launched its pill Wegovy. But then came Lilly’s explosive first-quarter earnings report on April 30, which sent shares soaring nearly 10% and, as it turned out, marked a low for the stock. Shares are up more than 50% since the April 29 close, and Thursday’s results suggest there’s still plenty of upside potential. As a result, we are increasing our price target from $1,300 to $1,500. We reiterate our rating of 2, at least for now, which means we would wait for a pullback before strengthening our position. LLY 1Y shows Lilly’s stock performance over the past 12 months. Bottom Line The Lilly train continues to roll, and more than five years into our investment, we’re in no hurry to get off it. Of course, we have recorded profits many times throughout our journey, as our investment discipline requires. But the main reason we chose this name – the enormous potential of GLP-1 drugs in treating obesity and diabetes – remains remarkably intact and shows no signs of cracking. As a healthcare stock, Lilly also helps our portfolio remain diversified, which is even more important in a market where investors are looking for winners outside of the development of artificial intelligence. Yes, Lilly has already achieved incredible growth, and meeting investor expectations will only become more and more difficult. However, this has been the case for a while now, and Lilly continues to deliver on its promises, Thursday included. The main driver remains tirzepatide, the active ingredient behind Mounjaro and Zepbound. In the United States, Mounjaro is marketed for type 2 diabetes and Zepbound for obesity. But in most countries, Mounjaro is the brand name for diabetes and obesity. This distinction has become increasingly relevant in recent quarters, as Mounjaro has been a major driver of the Wall Street consensus rise, thanks to impressive international growth. In the United States and international markets, Lilly’s share of the GLP-1 market increased in the third quarter compared to the quarter ended June. Mounjaro’s revenue grew 65% year over year to $10.7 billion in the quarter, beating the FactSet consensus of $700 million. Sales outside the United States increased 93% to $5.7 billion, with volume growth more than offsetting lower realized prices. Mounjaro’s inclusion on the Chinese government’s list of reimbursed prescription drugs, which took effect earlier this year, has fueled price pressures overseas. Zepbound’s revenue also beat estimates, with sales of $5.35 billion, representing 49% year-over-year growth. The consensus was for revenue of $5.05 billion. As with Mounjaro, the increase in the number of people taking the obesity drug has more than offset the decline in realized prices. This is encouraging following Lilly’s agreement with the Trump administration last year to reduce direct prices of GLP-1, in exchange for tariff relief and the introduction of Medicare reimbursement for obesity drugs. A temporary 18-month pilot program began July 1, allowing eligible Medicare beneficiaries access to the drugs for $50 per month. Lilly had argued that volume would offset price reductions, and that proved correct. During Thursday’s earnings conference call, executives gave a first look at expectations for 2027, saying they expected the GLP-1 market to see “sustained volume growth” that would offset pricing headwinds. Full guidance for next year will be provided during Lilly’s fourth-quarter earnings call in three months. CEO David Ricks told CNBC on Thursday that the growth runway for obesity drugs remains enormous, reinforcing our decision to remain invested. “It could be a lot more, ultimately,” Ricks said on “Squawk on the Street.” “Today, globally, we estimate that perhaps 3% of eligible patients access obesity care. In the United States, perhaps 10%. So the room for expansion here, in this market, is dramatic. Of course, Lilly is at the forefront. This will be driven both by our access efforts (such as the Medicare program) and by new innovations.” The Medicare Bridge program expands access to 20 million seniors, and Ricks said during the earnings conference call Thursday that more than half a million people have so far filled a prescription for a Lilly drug through the program. Among new Bridge patients, Rick reiterated that seven out of 10 start taking a Lilly medication – either injectable Zepbound or oral Foundayo. About three-quarters of Bridge patients take an injectable. The biggest blemish in the third-quarter results was Foundayo’s revenue, which at $184 million fell short of the consensus of $229 million, according to FactSet. The drug hit the U.S. market in April, four months after Novo’s Wegovy pill. The company has since expanded to four international markets: the United Arab Emirates, Saudi Arabia, Mexico and the United Kingdom. Executives said Foundayo’s launch would generally proceed as planned, while noting that launching in more countries and expanding its label to include treatment for type 2 diabetes, particularly in the United States, in 2027 would help drive more growth. For now, Lilly said its share of new obesity pill prescriptions is approaching four in 10 in the United States. For comparison, at an investor conference on September 14, a Lilly executive said that Foundayo had “more than 30% share of new oral GLP-1 prescriptions.” While we’d like to see Lilly continue to close the gap on the Wegovy pill, we’re pleased with Foundayo’s progress so far. From a broader perspective, we remain optimistic about Lilly’s next-generation treatments for obesity and diabetes, namely triple-action retatrutide and eloralintide, which is essentially a cousin of GLP-1 therapies. These are some of the “new innovations” that Ricks highlighted on CNBC as important growth drivers in the future. Additionally, on December 7, Lilly is hosting an investor day focused on its research and development efforts and pipeline, which could be a potential catalyst. Guidance Here is Lilly’s revised guidance for full year 2026: Revenue between $91 billion and $92 billion (up from $85 billion to $87 billion). Performance margin, a measure of operational profitability defined by Lilly, between 52% and 52.5% (up from 49% to 50.5%). Earnings per share between $35 and $36 (down from $35.50 to $36.50) (Jim Cramer’s charitable trust is long LLY. See here for a complete list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. 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