The ongoing earnings season has been filled with surprises in both directions. Some notable examples are Advanced Micro Devices (NASDAQ: AMD), which severely disappointed investors, and Garmin (NYSE: GRMN), which proved a surprise blockbuster.
Eli Lilly (NYSE: LLY), one of the U.S.’ foremost pharmaceutical giants, fell on the weaker side of the spectrum on October 30 when it revealed its earnings per share (EPS) came in at $1.18 – significantly below the $1.47 expected – and revenue was about $1 billion below expectations at $11.44 billion.
The $900 million sales miss for the weight-loss drug Zepbound and diabetes medication Mounjaro proved particularly surprising.
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So far, LLY stock is down 6.84% in the 5-day chart to its press-time price of $835.92.
Analysts set LLY stock 12-month price target
The magnitude of the surprise is perhaps best exemplified by the overall analyst rating – especially as, on October 31, post-earnings revisions are scarce – which is recorded as ‘strong buy’ on the stock analysis platform TipRanks.
Indeed, out of the 20 experts represented on the aggregate, 18 are shown as considering LLY as a ‘buy’ and 2 as being ‘neutral.’
Overall, the price target is also bullish with a ‘Strong Buy’ rating. On average, Eli Lilly shares are forecasted to rocket 28.30% in the coming 12 months to $1,063.29. Notably, there are no ‘sell’ ratings for Ely Lilly shares.
The most bullish prediction – provided by Citi (NYSE: C) as recently as October 25 – would even see LLY climb to $1,250. Furthermore, Citi’s Geoff Meacham even stuck to the ‘buy’ rating after the earnings as he highlighted that the Zepbound and Mounjaro misses had more to do with inventory issues than demand.
Additionally and interestingly, the third-quarter (Q3) report had the effect that even the lowest recent forecast – the $885 assigned by Cantor Fitzgerald in mid-September – now constitutes an upside. This dynamic is strangely fitting as, despite setting a low target, the finance giant did rate LLY as a ‘buy.’
It may also represent a new trend that has started emerging after the report. Bank of America (NYSE: BAC), one of the few prominent institutions that adjusted its coverage of Eli Lilly after the earnings, did lower the price target from $1,150 to $1,100, but it simultaneously kept the ‘buy’ recommendation.
Featured image:
Swat, Piotr. Eli Lilly and Company logo displayed on mobile phone screen. Digital image. Konskie, Poland – January 03, 2024. Shutterstock, January 04,2024. Date retrieved: October 31, 2024.
