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Zacks Investment Ideas feature highlights: Eli Lilly and Novartis
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For Immediate Release
Chicago, IL – January 17, 2024 – Today, Zacks Investment Ideas feature highlights Eli Lilly (LLY - Free Report) and Novartis (NVS - Free Report)
These Stocks Are Showing Relative Strength as S&P 500 Stalls Near Record Highs
U.S. markets have been stuck in stall mode to kick off the New Year, taking a breather following last year’s historic rally. It looks like we’ll have to wait a bit longer to see the S&P 500 clinch a new all-time high after sellers have stepped in repeatedly through the first two weeks. By my count, twice last week we hit the (closing) high from early 2022 on an intraday basis, but failed to close above the coveted threshold. This could be a temporary sign of exhaustion; buying pressure in the general area appears to be waning for the time being.
Still, from a longer-term perspective, we remain in an established uptrend. Technology (in particular semiconductor stocks) showed relative strength in 2023, buoyed by a powerful artificial intelligence theme. The concept of relative strength is simple; the measure is used to determine which security has shown the best performance over a period of time.
Sector Performance Year-to-Date
With every year comes a different market theme. The sectors that have shown the strongest trend year-to-date include health care and communication services, while the energy and materials sectors have lagged. This sector performance is somewhat of a mixed bag in my view, as both defensive and aggressive pockets of the market are near the top. It’s still quite early as we remain in the first inning of a twelve inning stretch.
Of course, there’s no guarantee that this performance will continue into the future. One of the shortcomings of using relative strength (or any technical indicator for that matter) is that it relies on the past; it can’t predict the future. Yet history has shown that trends tend to persist longer than most investors expect. Those who studied physics remember that an object in motion tends to stay in motion.
As investors, our job isn’t to predict an unknowable future. Our job is to position our portfolios in the direction that stocks are most likely to go. No one can consistently predict tops and bottoms of every move, but we can take advantage of major trends and allow our investing capital to compound over time. That’s what it’s all about.
This approach relies on having an intermediate or long-term time horizon. Investing isn’t a game where one approach is optimal; many different strategies can be successful. But for most investors, having a longer-term outlook can help to look past temporary volatility.
Individual Outperformers
Within the leading health care sector, the large-cap pharmaceutical industry is also showing relative strength. Two stocks in particular from this space stand out and have been outperforming the major indices by a wide margin.
Eli Lilly discovers, develops, and markets human pharmaceuticals worldwide. The company’s array of products serves a vast number of therapeutic areas including diabetes, neuroscience, oncology and immunology, all of which are high growth areas that represent significant commercial potential. Eli Lilly boasts a dependable pipeline and is one of the world’s largest pharmaceutical companies.
LLY stock has already risen an impressive 10.5% this year. Earnings for fiscal 2024 are expected to climb a staggering 91% relative to last year; analysts have increased their full-year EPS estimates by 0.64% in the past 60 days to $12.66/share.
Similarly, Switzerland-based Novartis is a global manufacturer and provider of health care products. The company offers prescription medicines for patients and physicians, focusing on therapeutic areas such as cardiovascular, immunology, neuroscience, and oncology. Novartis boasts one of broadest portfolios of oncology drugs and generics, positioning itself as one of the top pharmaceutical companies.
A Zacks Rank #2 (Buy), NVS stock appears to be breaking out and has already rallied nearly 7% this year. Analysts have bumped up their full-year EPS estimates by 1.54% in the past 60 days. The 2024 Zacks Consensus Estimate now stands at $7.23/share, reflecting a potential growth rate of 10.1% relative to last year.
Final Thoughts
We can use relative strength to identify stocks that are outperforming within leading sectors and industry groups. These two top pharmaceutical stocks have shown relatively little volatility while rewarding shareholders with substantial gains.
As the S&P 500 continues to hover near all-time highs, make sure you’re taking advantage of all that Zacks has to offer as we make our way further into the New Year.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Eli Lilly and Novartis
For Immediate Release
Chicago, IL – January 17, 2024 – Today, Zacks Investment Ideas feature highlights Eli Lilly (LLY - Free Report) and Novartis (NVS - Free Report)
These Stocks Are Showing Relative Strength as S&P 500 Stalls Near Record Highs
U.S. markets have been stuck in stall mode to kick off the New Year, taking a breather following last year’s historic rally. It looks like we’ll have to wait a bit longer to see the S&P 500 clinch a new all-time high after sellers have stepped in repeatedly through the first two weeks. By my count, twice last week we hit the (closing) high from early 2022 on an intraday basis, but failed to close above the coveted threshold. This could be a temporary sign of exhaustion; buying pressure in the general area appears to be waning for the time being.
Still, from a longer-term perspective, we remain in an established uptrend. Technology (in particular semiconductor stocks) showed relative strength in 2023, buoyed by a powerful artificial intelligence theme. The concept of relative strength is simple; the measure is used to determine which security has shown the best performance over a period of time.
Sector Performance Year-to-Date
With every year comes a different market theme. The sectors that have shown the strongest trend year-to-date include health care and communication services, while the energy and materials sectors have lagged. This sector performance is somewhat of a mixed bag in my view, as both defensive and aggressive pockets of the market are near the top. It’s still quite early as we remain in the first inning of a twelve inning stretch.
Of course, there’s no guarantee that this performance will continue into the future. One of the shortcomings of using relative strength (or any technical indicator for that matter) is that it relies on the past; it can’t predict the future. Yet history has shown that trends tend to persist longer than most investors expect. Those who studied physics remember that an object in motion tends to stay in motion.
As investors, our job isn’t to predict an unknowable future. Our job is to position our portfolios in the direction that stocks are most likely to go. No one can consistently predict tops and bottoms of every move, but we can take advantage of major trends and allow our investing capital to compound over time. That’s what it’s all about.
This approach relies on having an intermediate or long-term time horizon. Investing isn’t a game where one approach is optimal; many different strategies can be successful. But for most investors, having a longer-term outlook can help to look past temporary volatility.
Individual Outperformers
Within the leading health care sector, the large-cap pharmaceutical industry is also showing relative strength. Two stocks in particular from this space stand out and have been outperforming the major indices by a wide margin.
Eli Lilly discovers, develops, and markets human pharmaceuticals worldwide. The company’s array of products serves a vast number of therapeutic areas including diabetes, neuroscience, oncology and immunology, all of which are high growth areas that represent significant commercial potential. Eli Lilly boasts a dependable pipeline and is one of the world’s largest pharmaceutical companies.
LLY stock has already risen an impressive 10.5% this year. Earnings for fiscal 2024 are expected to climb a staggering 91% relative to last year; analysts have increased their full-year EPS estimates by 0.64% in the past 60 days to $12.66/share.
Similarly, Switzerland-based Novartis is a global manufacturer and provider of health care products. The company offers prescription medicines for patients and physicians, focusing on therapeutic areas such as cardiovascular, immunology, neuroscience, and oncology. Novartis boasts one of broadest portfolios of oncology drugs and generics, positioning itself as one of the top pharmaceutical companies.
A Zacks Rank #2 (Buy), NVS stock appears to be breaking out and has already rallied nearly 7% this year. Analysts have bumped up their full-year EPS estimates by 1.54% in the past 60 days. The 2024 Zacks Consensus Estimate now stands at $7.23/share, reflecting a potential growth rate of 10.1% relative to last year.
Final Thoughts
We can use relative strength to identify stocks that are outperforming within leading sectors and industry groups. These two top pharmaceutical stocks have shown relatively little volatility while rewarding shareholders with substantial gains.
As the S&P 500 continues to hover near all-time highs, make sure you’re taking advantage of all that Zacks has to offer as we make our way further into the New Year.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.