Eli Lilly & Co. (LLY) is up more than 8% so far Thursday morning after reporting second-quarter earnings that easily surpassed the Wall Street consensus. The company also raised its guidance for the full year.
The drugmaker posted adjusted earnings per share of $3.92, well ahead of the $2.60 that was expected by analysts. Revenue of $11.30 billion also blew the consensus out of the water, as the consensus was only $9.92 billion.
This worked out to a net income of $2.97 billion, nearly double the profit from this time last year of $1.76 billion. Part of this was due to higher prices for its popular drug Mounjaro, which didn’t see nearly as much use of savings card programs compared to the same quarter last year.
Mounjaro sales were more than three times higher than they were in 2023, and the company’s latest drug, Zepbound, saw a sales surge as well. This is only the second full quarter the drug has been offered, and it contributed $1.24 billion in revenue.
The company has benefited from an imbalance in demand and supply, as Eli Lilly has struggled to keep up. It has begun investing in more manufacturing facilities to meet consumer needs.
CEO David Ricks says that production should be 50% higher in the back half of this year. As its new plants ramp up. However, warnings were issued that a shortage of supply could persist going forward.
This has also forced executives to reassess the company’s outlook for the remainder of the year, as it’s set to expand Mounjaro sales overseas while releasing a suite of new products.
Now, the company is expecting somewhere between $45.4 billion and $46.6 billion for full-year revenue, up $3 billion from the previous forecast. Adjusted earnings guidance got a lift as well to a range of $16.10 to $16.60. The previous high-end of its outlook was only $14.
LLY has now gained 44% through 2024 thus far and looks to be in a position to finish the year strong. So, should you buy the stock on the heels of this latest earnings update?
Before you do anything else, take a moment to see what we found in the VectorVest stock software below. There are a few things you need to consider…
LLY Has Very Good Upside Potential and Excellent Safety, but the Timing is Just Fair Right Now
VectorVest is a proprietary stock rating system designed to help you win more trades with less work and stress by delivering clear, actionable insights in 3 simple ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
Each sits on a scale of 0.00-2.00 with 1.00 being the average, allowing for quick and easy interpretation. You’re even given a buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. Here’s what we found for LLY:
- Very Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. It’s a much better indicator than the typical comparison of price to value alone. The RV rating of 1.36 is very good for LLY right now.
- Excellent Safety: The RS rating is a risk indicator computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. LLY has an excellent RS rating of 1.40.
- Fair Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. The RT rating of 0.96 is just fair for LLY.
The overall VST rating of 1.23 is good for LLY, but not enough to earn it a buy. The stock is currently rated a hold. However, if today’s price trend persists, that could change.
So, take a closer look at this opportunity with a free stock analysis at VectorVest today so that you can capitalize when the time is right!
Want These Types of Insights at Your Fingertips so You Can Win More Trades?
Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.
VectorVest advocates buying safe, undervalued stocks, rising in price. LLY blew past analyst expectations on both the top and bottom lines in the second quarter as its popular drug Mounjaro and its latest offering Zepbound saw sales surge. The company lifted its outlook for the full year, too. The stock itself has very good upside potential, excellent safety, and fair timing.
Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!
Leave A Comment