Shortly after the opening bell, we will be selling 25 shares of Eli Lilly at roughly $782. Following the trade, Jim Cramer’s Charitable Trust will own 100 shares of LLY, decreasing its weighting to roughly 2.20% from 2.73%. We’re locking in big profits on our Eli Lilly position following disappointing news from Novo Nordisk, its main competitor in the GLP-1 market. Novo Nordisk shares are plunging more than 20% on Tuesday after the company slashed its 2025 sales growth outlook to the range of 8% to 14% from 13% to 21%. This significant revision was driven by lower expectations for its obesity drug Wegovy and diabetes drug Ozempic in the U.S. market, as well as lower-than-expected penetration for Wegovy in other markets. The company attributed the U.S. weakness to the use of compounded GLP-1s, slower-than-expected market expansion and competition. Eli Lilly shares are down in sympathy with these results. Some of this makes sense, and some of it doesn’t. Novo Nordisk citing increased competition is actually a positive sign for Eli Lilly. It means Lilly is continuing to gain share. However, the slower-than-expected market expansion is a concerning signal to us. The continued use of compounded GLP-1s is a negative too. Eli Lilly and Novo Nordisk are two different companies. Eli Lilly has the superior GLP-1s, it will have an oral medication approved early next year, and has been a leader in manufacturing capacity. Novo Nordisk has been in disarray for about a year, struggling with supply constraints, battling the compounders like Hims & Hers, and losing share to Lilly. Novo fired its CEO in May and named internal candidate Maziar Mike Doustdar as its new chief Tuesday. While it’s possible that Novo’s outlook cut is unique to the company and Eli Lilly is doing much better, we simply don’t want to take that chance ahead of Lilly’s earnings report on Aug. 7 That’s why we are taking profits on Tuesday and downgrading our rating to a 2. We’ll look to revisit our rating when we get better visibility into the second half of the year. From this sale, we will realize a strong gain of around 220% on stock purchased in January 2022. (Jim Cramer’s Charitable Trust is long LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
