We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Lilly Stock a Portfolio Must Have Ahead of its Q3 Earnings?
Read MoreHide Full Article
Eli Lilly and Company (LLY - Free Report) will report its third-quarter 2024 earnings on Oct. 30, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $12.03 billion and $1.53 per share, respectively. Earnings estimates for 2024 have declined from $16.47 to $13.83 per share over the past 30 days. The decline in estimates could be due to costs related to the acquisition of Morphic, which was closed in August and should be recorded as a charge against earnings in the third quarter. For 2025, earnings estimates have risen from $23.97 to $24.24 per share over the same timeframe.
Image Source: Zacks Investment Research
LLY’s Earnings Surprise History
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 69.07%, on average. In the last reported quarter, the company delivered an earnings surprise of 48.48%, as seen in the chart below.
Image Source: Zacks Investment Research
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping LLY’s Upcoming Results
In the third quarter, top-line growth is expected to have been driven by exceptional demand growth for Lilly’s FDA-approved tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound.
Mounjaro was launched in mid-2022, while Zepbound was launched in November 2023. The supply trends of both drugs improved in the second quarter, thus boosting sales, a trend expected to have continued in the third quarter.
However, from the second half of 2024, Lilly expects typical pricing headwinds for Mounjaro, like for all diabetes medicines, as savings card dynamics should cease to have a notable effect on realized price comparisons to base periods.
The Zacks Consensus Estimate as well as our model estimate for Mounjaro is $3.7 billion. Our model estimate for Zepbound is $1.5 billion.
Higher demand and volume growth for Lilly’s key growth drugs like Emgality, Jardiance, Olumiant, Retevmo, Taltz and Verzenio are likely to have provided top-line support, driven by increased demand trends. Particularly, Verzenio and Jardiance sales are expected to have been strong. Verzenio sales are likely to have benefited from the launch of the early breast cancer indication.
While volumes are expected to have increased for most drugs, lower realized prices are likely to have continued to hurt sales of most drugs like Trulicity. Sales of Trulicity are also likely to have been hurt by competitive dynamics and supply constraints.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $1.13 billion, $837.0 million, $1.38 billion, $822.0 million, $241 million and $163 million, respectively.
Our estimates for Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are $1.1 billion, $836.6 million, $1.43 billion, $823.3 million, $246.3 million and $155.4 million, respectively.
Newer products (products launched from 2022 onwards) like Ebglyss, Jaypirca and Omvoh are likely to have contributed to sales growth.
In July, Lilly won a long-awaited FDA approval for Kisunla (donanemab) for treating early symptomatic Alzheimer's disease. Kisunla is only the second drug on the market to treat Alzheimer's disease after Biogen (BIIB) and its Japan-based partner Eisai’s Leqembi. Kisunla was approved in Japan in September. Lilly is expected to discuss the commercialization plans for Kisunla on the third-quarter conference call.
Sales of most established drugs like Forteo, Alimta and Humulin are likely to have declined in the quarter. Humalog sales might have increased in the quarter.
Higher marketing, selling and administrative expenses to support the launch of new products and indications are likely to have hurt operating profits in the quarter.
In August, Lilly closed the previously announced acquisition of small biotech Morphic Therapeutics. The acquisition will expand Lilly’s pipeline in immunology, a core area for the company, by adding Morphic’s oral integrin therapies for treating serious chronic diseases. Lilly is likely to have recorded a huge charge against earnings related to the acquisition in the quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Lilly’s stock.
LLY’s Price Performance and Valuation
Lilly’s stock has risen 55.0% so far this year compared with an increase of 19.1% for the industry. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.
LLY Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
The stock is trading at a premium to the industry, as seen in the chart below.
LLY Stock Valuation
Image Source: Zacks Investment Research
Consider Buying LLY Stock
Lilly has consistently reported strong revenues and profits and dealt well with expiring patents and increasing competition. It has seen unparalleled success with its GLP-1 drugs, Mounjaro and Zepbound.
Lilly’s tirzepatide medicines face strong competition from Novo Nordisk’s (NVO - Free Report) semaglutide. Semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Wegovy sales have also remained strong. Though Novo Nordisk is also making efforts to improve the supply of its semaglutide drugs, the product remains in short supply. While other competitors like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are making rapid progress in their GLP-1-based diabetes/obesity candidates, we believe they will take time to catch up.
In the past couple of years, Lilly has received approvals for several new drugs like Kisunla, Omvoh and Jaypirca and witnessed pipeline and regulatory success. Its new drugs have contributed significantly to top-line growth so far in 2024. Lilly is also making rapid pipeline progress in areas like obesity, diabetes and Alzheimer’s.
Invest in LLY’s Stock
Lilly is a great stock to own based on its strong overall financial performance and robust drug pipeline. Though LLY currently trades at a premium to the industry, investors should still consider adding this stock. The company has robust growth prospects, which make it a top stock to own.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Lilly Stock a Portfolio Must Have Ahead of its Q3 Earnings?
Eli Lilly and Company (LLY - Free Report) will report its third-quarter 2024 earnings on Oct. 30, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $12.03 billion and $1.53 per share, respectively. Earnings estimates for 2024 have declined from $16.47 to $13.83 per share over the past 30 days. The decline in estimates could be due to costs related to the acquisition of Morphic, which was closed in August and should be recorded as a charge against earnings in the third quarter. For 2025, earnings estimates have risen from $23.97 to $24.24 per share over the same timeframe.
LLY’s Earnings Surprise History
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 69.07%, on average. In the last reported quarter, the company delivered an earnings surprise of 48.48%, as seen in the chart below.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
What Does Our Model Say for Lilly?
Lilly has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping LLY’s Upcoming Results
In the third quarter, top-line growth is expected to have been driven by exceptional demand growth for Lilly’s FDA-approved tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound.
Mounjaro was launched in mid-2022, while Zepbound was launched in November 2023. The supply trends of both drugs improved in the second quarter, thus boosting sales, a trend expected to have continued in the third quarter.
However, from the second half of 2024, Lilly expects typical pricing headwinds for Mounjaro, like for all diabetes medicines, as savings card dynamics should cease to have a notable effect on realized price comparisons to base periods.
The Zacks Consensus Estimate as well as our model estimate for Mounjaro is $3.7 billion. Our model estimate for Zepbound is $1.5 billion.
Higher demand and volume growth for Lilly’s key growth drugs like Emgality, Jardiance, Olumiant, Retevmo, Taltz and Verzenio are likely to have provided top-line support, driven by increased demand trends. Particularly, Verzenio and Jardiance sales are expected to have been strong. Verzenio sales are likely to have benefited from the launch of the early breast cancer indication.
While volumes are expected to have increased for most drugs, lower realized prices are likely to have continued to hurt sales of most drugs like Trulicity. Sales of Trulicity are also likely to have been hurt by competitive dynamics and supply constraints.
The Zacks Consensus Estimate for Trulicity, Taltz, Verzenio, Jardiance, Olumiant and Emgality is $1.13 billion, $837.0 million, $1.38 billion, $822.0 million, $241 million and $163 million, respectively.
Our estimates for Trulicity, Taltz, Verzenio, Jardiance, Olumiant, and Emgality are $1.1 billion, $836.6 million, $1.43 billion, $823.3 million, $246.3 million and $155.4 million, respectively.
Newer products (products launched from 2022 onwards) like Ebglyss, Jaypirca and Omvoh are likely to have contributed to sales growth.
In July, Lilly won a long-awaited FDA approval for Kisunla (donanemab) for treating early symptomatic Alzheimer's disease. Kisunla is only the second drug on the market to treat Alzheimer's disease after Biogen (BIIB) and its Japan-based partner Eisai’s Leqembi. Kisunla was approved in Japan in September. Lilly is expected to discuss the commercialization plans for Kisunla on the third-quarter conference call.
Sales of most established drugs like Forteo, Alimta and Humulin are likely to have declined in the quarter. Humalog sales might have increased in the quarter.
Higher marketing, selling and administrative expenses to support the launch of new products and indications are likely to have hurt operating profits in the quarter.
In August, Lilly closed the previously announced acquisition of small biotech Morphic Therapeutics. The acquisition will expand Lilly’s pipeline in immunology, a core area for the company, by adding Morphic’s oral integrin therapies for treating serious chronic diseases. Lilly is likely to have recorded a huge charge against earnings related to the acquisition in the quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Lilly’s stock.
LLY’s Price Performance and Valuation
Lilly’s stock has risen 55.0% so far this year compared with an increase of 19.1% for the industry. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.
LLY Stock Outperforms Industry, Sector & S&P 500
The stock is trading at a premium to the industry, as seen in the chart below.
LLY Stock Valuation
Consider Buying LLY Stock
Lilly has consistently reported strong revenues and profits and dealt well with expiring patents and increasing competition. It has seen unparalleled success with its GLP-1 drugs, Mounjaro and Zepbound.
Lilly’s tirzepatide medicines face strong competition from Novo Nordisk’s (NVO - Free Report) semaglutide. Semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Wegovy sales have also remained strong. Though Novo Nordisk is also making efforts to improve the supply of its semaglutide drugs, the product remains in short supply. While other competitors like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) are making rapid progress in their GLP-1-based diabetes/obesity candidates, we believe they will take time to catch up.
In the past couple of years, Lilly has received approvals for several new drugs like Kisunla, Omvoh and Jaypirca and witnessed pipeline and regulatory success. Its new drugs have contributed significantly to top-line growth so far in 2024. Lilly is also making rapid pipeline progress in areas like obesity, diabetes and Alzheimer’s.
Invest in LLY’s Stock
Lilly is a great stock to own based on its strong overall financial performance and robust drug pipeline. Though LLY currently trades at a premium to the industry, investors should still consider adding this stock. The company has robust growth prospects, which make it a top stock to own.