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Will Eli Lilly (LLY) Surpass Q3 Earnings Expectations?
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We expect Eli Lilly & Company (LLY - Free Report) to beat expectations when it reports third-quarter 2021 results on Oct 26, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 1.06%.
This large drugmaker’s performance has been rather weak, with earnings missing expectations in three of the trailing four quarters while beating in one. The company delivered a four-quarter negative earnings surprise of 2.08%, on average.
Lilly’s stock has risen 44.3% this year so far compared with an increase of 9.9% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
Sales of all Lilly’s key drugs recovered from the impact of the pandemic in the second quarter. We expect the recovery to have sustained in the third quarter.
In the third quarter, higher demand and volume growth for its key drugs including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality is likely to have provided top-line support.
The Zacks Consensus Estimate for sales of Trulicity, Taltz, Verzenio and Jardiance is pegged at $1.46 billion, $568 million, $322 million and $384 million, respectively.
Sales of key drug Basaglar declined in the past few quarters due to lower realized prices and weak demand caused by competitive pressure in the United States. It remains to be seen if the sales trends improved in the third quarter. The Zacks Consensus Estimate for sales of Basaglar is $210 million.
However, lower realized prices due to increased rebates are likely to have hurt sales of most drugs, mainly Taltz and Trulicity.
Generic competition for several drugs is also expected to have negatively impacted the top line in the third quarter.
Importantly, revenues from its COVID-19 therapies were lower than expected in the past two quarters due to competition from superior therapies and lower demand amid rising vaccinations. Lower demand for COVID therapies forced the company to lower its full-year sales guidance twice this year.
In April, Lilly requested the FDA to revoke the Emergency Use Authorization (EUA) granted to its antibody medicine for COVID-19, bamlanivimab as a monotherapy. Lilly is now supplying its antibody cocktail, bamlanivimab and etesevimab together, to treat mild-to-moderate COVID-19 in high-risk patients. The cocktail medicine was granted emergency approval by the FDA in February. Investors will be keen to know the cocktail medicine’s sales numbers in the third quarter and whether its sales improved amid rising infection rates (due to the Delta variant) in the third quarter
Key Recent Approval
In September, the FDA expanded the Emergency Use Authorization (EUA) for Lilly’s cocktail antibody medicine, bamlanivimab plus etesevimab to include the post-exposure prevention (prophylaxis) for COVID-19 indication.
In the same month, Lilly announced a deal to supply 388,000 doses of etesevimab to the U.S. government. These doses will be paired with existing doses of bamlanivimab, which has already been purchased by the government under an earlier deal. Lilly expects to ship 200,000 etesevimab doses in the third quarter and the remaining in the fourth quarter. The deal is expected to generate $330 million in revenues for Lilly in the second half of 2021.
Earnings Whispers
Our proven model predicts an earnings beat for Lilly in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Lilly’s Earnings ESP is +0.76% as the Most Accurate Estimate of $1.99 is higher than the Zacks Consensus Estimate of $1.98. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly has a Zacks Rank #3
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Image: Bigstock
Will Eli Lilly (LLY) Surpass Q3 Earnings Expectations?
We expect Eli Lilly & Company (LLY - Free Report) to beat expectations when it reports third-quarter 2021 results on Oct 26, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 1.06%.
This large drugmaker’s performance has been rather weak, with earnings missing expectations in three of the trailing four quarters while beating in one. The company delivered a four-quarter negative earnings surprise of 2.08%, on average.
Eli Lilly and Company Price and EPS Surprise
Eli Lilly and Company price-eps-surprise | Eli Lilly and Company Quote
Lilly’s stock has risen 44.3% this year so far compared with an increase of 9.9% for the industry.
Factors to Consider
Sales of all Lilly’s key drugs recovered from the impact of the pandemic in the second quarter. We expect the recovery to have sustained in the third quarter.
In the third quarter, higher demand and volume growth for its key drugs including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality is likely to have provided top-line support.
The Zacks Consensus Estimate for sales of Trulicity, Taltz, Verzenio and Jardiance is pegged at $1.46 billion, $568 million, $322 million and $384 million, respectively.
Sales of key drug Basaglar declined in the past few quarters due to lower realized prices and weak demand caused by competitive pressure in the United States. It remains to be seen if the sales trends improved in the third quarter. The Zacks Consensus Estimate for sales of Basaglar is $210 million.
However, lower realized prices due to increased rebates are likely to have hurt sales of most drugs, mainly Taltz and Trulicity.
Generic competition for several drugs is also expected to have negatively impacted the top line in the third quarter.
Importantly, revenues from its COVID-19 therapies were lower than expected in the past two quarters due to competition from superior therapies and lower demand amid rising vaccinations. Lower demand for COVID therapies forced the company to lower its full-year sales guidance twice this year.
In April, Lilly requested the FDA to revoke the Emergency Use Authorization (EUA) granted to its antibody medicine for COVID-19, bamlanivimab as a monotherapy. Lilly is now supplying its antibody cocktail, bamlanivimab and etesevimab together, to treat mild-to-moderate COVID-19 in high-risk patients. The cocktail medicine was granted emergency approval by the FDA in February. Investors will be keen to know the cocktail medicine’s sales numbers in the third quarter and whether its sales improved amid rising infection rates (due to the Delta variant) in the third quarter
Key Recent Approval
In September, the FDA expanded the Emergency Use Authorization (EUA) for Lilly’s cocktail antibody medicine, bamlanivimab plus etesevimab to include the post-exposure prevention (prophylaxis) for COVID-19 indication.
In the same month, Lilly announced a deal to supply 388,000 doses of etesevimab to the U.S. government. These doses will be paired with existing doses of bamlanivimab, which has already been purchased by the government under an earlier deal. Lilly expects to ship 200,000 etesevimab doses in the third quarter and the remaining in the fourth quarter. The deal is expected to generate $330 million in revenues for Lilly in the second half of 2021.
Earnings Whispers
Our proven model predicts an earnings beat for Lilly in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Lilly’s Earnings ESP is +0.76% as the Most Accurate Estimate of $1.99 is higher than the Zacks Consensus Estimate of $1.98. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lilly has a Zacks Rank #3
Stocks to Consider
Here are some large drug stocks that have the right combination of elements to beat on earnings this time around:
Regeneron (REGN - Free Report) has an Earnings ESP of +11.43% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merck (MRK - Free Report) has an Earnings ESP of +2.64% and a Zacks Rank #3.
Pfizer (PFE - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank #2.