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Eli Lilly Soars on Blockbuster Q2 Earnings: ETFs to Tap
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In a surprising turn of events, the pharmaceutical giant Eli Lilly and Company (LLY - Free Report) experienced its most significant surge in stock prices in over two decades following the release of an impressive second-quarter 2023 earnings report and an optimistic outlook. The stock soared 15% to heights not seen since the early 2000s, adding $64 billion to its market cap.
This has sparked investors’ confidence in the company’s growth prospects, compelling them to flock into the stock of LLY. For them, we have highlighted ETFs having the largest exposure to the drugmaker that could be compelling picks to tap the strong growth. These include iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , Harbor Health Care ETF (MEDI - Free Report) , Horizon Kinetics Medical ETF (MEDX - Free Report) , iShares U.S. Healthcare ETF (IYH - Free Report) , and Health Care Select Sector SPDR Fund (XLV - Free Report) .
Inside The Surge
Eli Lilly topped estimates on both fronts. Earnings per share came in at $2.11, above the Zacks Consensus Estimate of $1.98 and 69% higher year over year. Revenues rose 28% to $8.31 billion and edged past the estimate of $7.55 billion. The robust results were driven by strong sales in Mounjaro, the firm's diabetes injection, and future growth products.
Mounjaro's sales jumped 72.3% to $979.7 million, making it the second-biggest revenue generator for the company, behind only another diabetes drug, Trulicity. Eli Lilly is now hoping that the Food and Drug Administration will approve it for weight loss. Sales of breast cancer medicine, Verzenio, jumped 57% and diabetes pill, Jardiance, climbed 45% (read: ETFs to Capitalize on Eli Lilly's Buyout of DICE Therapeutics).
Eli Lilly raised its full-year revenue and earnings guidance, signaling a continued positive trajectory for its business operations. Revenues are expected in the range of $33.4 billion to $33.9 billion, up from its previous outlook of $31.2 billion to $31.7 billion. The earnings per share guidance has been raised to 9.70-$9.90 from $8.65-$8.85. Furthermore, the company highlighted its strong pipeline of potential new drugs, hinting at sustained growth in the upcoming years.
iShares U.S. Pharmaceuticals ETF provides exposure to 40 companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. Of these, Eli Lilly takes the second spot, accounting for a 22.4% share.
iShares U.S. Pharmaceuticals ETF has $369.8 million in AUM and charges 40 bps in fees and expenses. Volume is lower as it exchanges about 6,000 shares a day. The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
Harbor Health Care ETF is actively managed by Westfield Capital and primarily invests in the securities of companies principally engaged in the research, development, production or distribution of products and services related to the health care industry. MEDI is a concentrated portfolio of 38 companies that Westfield believes are best positioned to benefit from the secular growth and innovation within the U.S. healthcare system with long-term alpha potential. Eli Lilly occupies the second position with a 15.2% share.
Harbor Health Care ETF has accumulated $4.4 million in its asset base while trading in an average daily volume of 300 shares. It charges 80 bps in annual fees.
Horizon Kinetics Medical ETF is an actively-managed ETF that will invest primarily in patented first-line pharmaceuticals and biologics as these products tend to have high profit margins and significant barriers to entry. It holds 38 stocks in its basket, with Eli Lilly taking the top spot at 9.7% of the portfolio.
Horizon Kinetics Medical ETF has gathered $18.4 million in its asset base since its inception in January and charges 85 bps in annual fees. It trades in an average daily volume of 1,000 shares.
iShares U.S. Healthcare ETF offers exposure to 117 U.S. healthcare equipment and services, pharmaceuticals, and biotechnology companies by tracking the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index. Here, Eli Lilly is the third firm, accounting for 7.3% of the total assets. In terms of industrial exposure, pharma takes the top spot at 29.9%, followed by healthcare equipment (19.6%) and biotech (17.5%).
iShares U.S. Healthcare ETF has amassed $3.1 billion in its asset base, while charging 39 bps in annual fees. It trades in a moderate volume of around 40,000 shares a day and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 4 Top-Ranked Sector ETFs to Buy in the Second Half).
Health Care Select Sector SPDR Fund is the most popular healthcare ETF and follows the Health Care Select Sector Index. It holds 65 securities in its basket, with LLY occupying the third position at 7.1% of the assets. Pharma and healthcare providers and services take the largest share at 30.2% and 22.1% share, respectively, while healthcare equipment and supplies, biotech, and life sciences tools & services also have double-digit exposure each.
Health Care Select Sector SPDR Fund manages $40 billion in its asset base and trades in a heavy volume of around 9 million shares. The expense ratio comes in at 0.10%. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
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Eli Lilly Soars on Blockbuster Q2 Earnings: ETFs to Tap
In a surprising turn of events, the pharmaceutical giant Eli Lilly and Company (LLY - Free Report) experienced its most significant surge in stock prices in over two decades following the release of an impressive second-quarter 2023 earnings report and an optimistic outlook. The stock soared 15% to heights not seen since the early 2000s, adding $64 billion to its market cap.
This has sparked investors’ confidence in the company’s growth prospects, compelling them to flock into the stock of LLY. For them, we have highlighted ETFs having the largest exposure to the drugmaker that could be compelling picks to tap the strong growth. These include iShares U.S. Pharmaceuticals ETF (IHE - Free Report) , Harbor Health Care ETF (MEDI - Free Report) , Horizon Kinetics Medical ETF (MEDX - Free Report) , iShares U.S. Healthcare ETF (IYH - Free Report) , and Health Care Select Sector SPDR Fund (XLV - Free Report) .
Inside The Surge
Eli Lilly topped estimates on both fronts. Earnings per share came in at $2.11, above the Zacks Consensus Estimate of $1.98 and 69% higher year over year. Revenues rose 28% to $8.31 billion and edged past the estimate of $7.55 billion. The robust results were driven by strong sales in Mounjaro, the firm's diabetes injection, and future growth products.
Mounjaro's sales jumped 72.3% to $979.7 million, making it the second-biggest revenue generator for the company, behind only another diabetes drug, Trulicity. Eli Lilly is now hoping that the Food and Drug Administration will approve it for weight loss. Sales of breast cancer medicine, Verzenio, jumped 57% and diabetes pill, Jardiance, climbed 45% (read: ETFs to Capitalize on Eli Lilly's Buyout of DICE Therapeutics).
Eli Lilly raised its full-year revenue and earnings guidance, signaling a continued positive trajectory for its business operations. Revenues are expected in the range of $33.4 billion to $33.9 billion, up from its previous outlook of $31.2 billion to $31.7 billion. The earnings per share guidance has been raised to 9.70-$9.90 from $8.65-$8.85. Furthermore, the company highlighted its strong pipeline of potential new drugs, hinting at sustained growth in the upcoming years.
ETFs to Tap
iShares U.S. Pharmaceuticals ETF (IHE - Free Report)
iShares U.S. Pharmaceuticals ETF provides exposure to 40 companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. Of these, Eli Lilly takes the second spot, accounting for a 22.4% share.
iShares U.S. Pharmaceuticals ETF has $369.8 million in AUM and charges 40 bps in fees and expenses. Volume is lower as it exchanges about 6,000 shares a day. The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
Harbor Health Care ETF (MEDI - Free Report)
Harbor Health Care ETF is actively managed by Westfield Capital and primarily invests in the securities of companies principally engaged in the research, development, production or distribution of products and services related to the health care industry. MEDI is a concentrated portfolio of 38 companies that Westfield believes are best positioned to benefit from the secular growth and innovation within the U.S. healthcare system with long-term alpha potential. Eli Lilly occupies the second position with a 15.2% share.
Harbor Health Care ETF has accumulated $4.4 million in its asset base while trading in an average daily volume of 300 shares. It charges 80 bps in annual fees.
Horizon Kinetics Medical ETF (MEDX - Free Report)
Horizon Kinetics Medical ETF is an actively-managed ETF that will invest primarily in patented first-line pharmaceuticals and biologics as these products tend to have high profit margins and significant barriers to entry. It holds 38 stocks in its basket, with Eli Lilly taking the top spot at 9.7% of the portfolio.
Horizon Kinetics Medical ETF has gathered $18.4 million in its asset base since its inception in January and charges 85 bps in annual fees. It trades in an average daily volume of 1,000 shares.
iShares U.S. Healthcare ETF (IYH - Free Report)
iShares U.S. Healthcare ETF offers exposure to 117 U.S. healthcare equipment and services, pharmaceuticals, and biotechnology companies by tracking the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index. Here, Eli Lilly is the third firm, accounting for 7.3% of the total assets. In terms of industrial exposure, pharma takes the top spot at 29.9%, followed by healthcare equipment (19.6%) and biotech (17.5%).
iShares U.S. Healthcare ETF has amassed $3.1 billion in its asset base, while charging 39 bps in annual fees. It trades in a moderate volume of around 40,000 shares a day and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 4 Top-Ranked Sector ETFs to Buy in the Second Half).
Health Care Select Sector SPDR Fund (XLV - Free Report)
Health Care Select Sector SPDR Fund is the most popular healthcare ETF and follows the Health Care Select Sector Index. It holds 65 securities in its basket, with LLY occupying the third position at 7.1% of the assets. Pharma and healthcare providers and services take the largest share at 30.2% and 22.1% share, respectively, while healthcare equipment and supplies, biotech, and life sciences tools & services also have double-digit exposure each.
Health Care Select Sector SPDR Fund manages $40 billion in its asset base and trades in a heavy volume of around 9 million shares. The expense ratio comes in at 0.10%. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.