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Lilly (LLY) Moves 4.5% Higher: Will This Strength Last?

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Eli Lilly (LLY - Free Report) shares rallied 4.5% in the last trading session to close at $605.28. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.3% loss over the past four weeks.

The stock rallied driven by optimism that grew when Danish healthcare company, Novo Nordisk announced that a kidney outcomes study, called FLOW, evaluating its diabetes medicine Ozempic (semaglutide) was being stopped earlier than planned due to efficacy.

This drugmaker is expected to post quarterly earnings of $2.64 per share in its upcoming report, which represents a year-over-year change of +33.3%. Revenues are expected to be $8.93 billion, up 28.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Lilly, the consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on LLY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lilly is part of the Zacks Large Cap Pharmaceuticals industry. Sanofi (SNY - Free Report) , another stock in the same industry, closed the last trading session 0.6% higher at $54.79. SNY has returned -0.4% in the past month.

For Sanofi, the consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $1.37. This represents a change of -5.5% from what the company reported a year ago. Sanofi currently has a Zacks Rank of #4 (Sell).


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