Ely Lilly Brings in Big Money

And the drug manufacturer could jump more due to solid financial results and a bright future. But another likely reason is Big Money lifting the stock.

Big Money Loves Lilly

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Lilly has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals LLY has made the last year.

The last few weeks have seen Big Money activity too. Each green bar signals big trading volumes as the stock ramped in price:

Chart, histogram Description automatically generated

Source: www.mapsignals.com

In the last year, the stock attracted 16 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Lilly Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Lilly has been growing earnings well and sports a healthy profit margin. Take a look:

  • 3-year EPS growth rate (+28.6%)
  • Profit margin (+19.7%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, LLY has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

LLY has a lot of qualities that are attracting Big Money. It’s made the Top 20 report 83 times since 1990, with its first appearance on 01/08/1990…and gaining 4,794.5% since. The blue bars below show when Lilly was a top pick:

Chart, histogram Description automatically generated

Source: www.mapsignals.com

It’s been a top stock in the health care sector according to the MAPsignals process. I wouldn’t be surprised if LLY makes additional appearances in the years to come. Let’s tie this all together.

Lilly Price Prediction

The Lilly rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, and it pays a current dividend of more than 1.2%. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in LLY at the time of publication.

Learn more about the MAPsignals process here.

Contact

https://mapsignals.com/contact/

Best Healthcare Stocks To Buy Now

Key Insights

  • Some healthcare stocks have outperformed S&P 500 this year amid rising demand for safe-haven assets. 
  • Johnson & Johnson has recently tested all-time highs and remains reasonably valued. 
  • While some healthcare stocks look rather expensive, Pfizer could be bought at less than 10 forward P/E. 

Recent trading sessions have been volatile, and investors continue to search for safe-haven assets. Healthcare stocks have often served in this role, so let’s take a look at the leaders in this market segment.

Johnson & Johnson

A traditional “widow-and-orphan” stock, Johnson & Johnson is trading near all-time highs despite the recent pullback of S&P 500.

The stock is trading at roughly 17 forward P/E, which is not cheap for an established company. However, the current valuation reflects the high demand for Johnson & Johnson stock and its safe dividend.

It should be noted that analyst estimates have started to move lower in recent weeks, but these changes failed to put any pressure on Johnson & Johnson.

Eli Lilly

Eli Lilly is more expensive than Johnson & Johnson. The stock has pulled back from recent highs, but it is still trading at an expensive 31 forward P/E.

The market is ready to pay a premium for Eli Lilly stock as earnings estimates are increasing at a robust pace. The potential increase of demand for safe-haven assets could provide more support to Eli Lilly shares.

Pfizer

Pfizer stock has lost momentum in recent months as traders focused on the weaker-than-expected demand for the company’s antiviral drug Paxlovid. In addition, all vaccine stocks have found themselves under pressure as traders believed that the acute phase of the coronavirus pandemic was coming to an end.

However, Pfizer is not a one trick pony, and its revenue base is stable. Currently, analysts expect that Pfizer will report earnings of $5.58 per share in the next year, so the stock is trading at less than 9 forward P/E. Such valuation levels could attract value-oriented investors.

For a look at all of today’s economic events, check out our economic calendar.

Ely Lilly Bringing in Big Money

And the drugmaker could rise even more due to successful medicines, more in the pipeline, and a current dividend of nearly 1.3%. But another likely reason is Big Money lifting the stock.

Ely Lilly Attracts Big Money

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Ely Lilly has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals LLY has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 17 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Ely Lilly Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Ely Lilly has been growing sales and earnings at double-digit rates. Take a look:

  • 1-year sales growth rate (+15.4%)
  • 3-year EPS growth rate (+28.6%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, LLY has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

LLY has a lot of qualities that are attracting Big Money. It’s made this list 10 times since 2018, with its first appearance on 10/16/2018…and gaining 197.5% since. The blue bars below show the times that Ely Lilly was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the health care sector according to the MAPsignals process. I wouldn’t be surprised if LLY makes additional appearances in the years to come. Let’s tie this all together.

Ely Lilly Price Prediction

The Ely Lilly rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, and it pays a nearly 1.3% dividend. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in LLY at the time of publication.

Learn more about the MAPsignals process here.

Contact

https://mapsignals.com/contact/

 

Top 4 Things Traders Have to Know Today

What is happening with Meta, Paypal and Spotify?

Spotify didn’t actually issue annual guidance, which seems to have exacerbated worries about potential subscriber growth potential. All three were down by double-digits in after hours trading at one point last night.

Competition is clearly much more fierce as larger players are starting to dial it in and use the latest technology to gain better traction i.e. Visa, Mastercard, etc. I also read reports this week that Apple is diving deeper into the payment and banking space and will soon be able to offer all kinds of options via the smartphone.

In simple terms, I wonder if PayPal executives could see they had a “growth” problem and that’s why they took a look at Pinterest a few months back. I heard rumors yesterday perhaps they might be looking at Robinhood.

At the moment the stock market just doesn’t seem real forgiving to those who swing and miss. On a somewhat positive note, Facebook disclosed they purchased back +$20 billion of their own stock in the last quarter.

Bulls are hoping for solid results from Amazon and Snap today to help prevent sentiment in the tech sector from creating more fallout. I’m not holding my breath!

Data to watch

Results are also due from Activision Blizzard, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, SnapOn, Wynn Resorts, and Xylem.

On the economic data front, Factory Orders, the ISM Non-Manufacturing Index, and Productivity and Costs are due today. Productivity and Costs has become a more closely watched report as worries about climbing wages have grown. In the third quarter, productivity fell -5.2% (the most since 1960) and labor costs rose +9.6%.

Obviously, weakening productivity and rising costs is a bad combo for corporate profits so reversing this trend is a high priority. It may be tough to find much relief in the near-term with the labor market expected to remain extremely tight.

The shortage of workers has also been exacerbated by the latest Covid wave. ADP’s private payrolls report yesterday showed a decline of -301,000 jobs for January versus the estimate for a +200,000 gain, the first reported net job less since December 2020 according ADP.

Covid issue

Most analysts blame last month’s Covid surge for the decline and expect it is just temporary. The official January Employment Report on Friday is expected to show a gain of around +150,000 jobs, though the government has warned that the data won’t be reliable due to Covid-related reporting problems. Hopefully we’ll soon stop hearing that excuse as the Omicron Covid wave does seem to be burning itself out in the U.S. Case numbers across the country are about half of what they were in mid-January.

Hospitalizations have finally started to come down, too, which experts say is a more reliable measure. I hate to mention it but health officials are currently monitoring a mutated strain of Omicron known as “BA.2″… when does it end?

The standoff between Ukraine and Russia

Also still on the radar is the standoff between Russia and Ukraine. The U.S. is now readying to send more than +3,000 troops to bases in Eastern Europe as new satellite images appeared to show an even further increase in Russian troop buildup on Ukraine’s borders. Whether or not war is a realistic threat or not, the climbing tensions continue to stoke the flames in the energy markets.

Brent crude futures are trading near $90 as OPEC struggles to meet production targets and global physical supplies continue to tighten. The 19 OPEC+ countries with quotas underperformed their production targets by -832,000 b/d in December. Russia is currently the top OPEC+ producer, so any disruption to those supplies runs the risk of shooting oil prices even higher. Take note the front-end of the natural gas market is up over +50% in the first month of the new year. It’s certainly going to be a wild ride in 2022!

 

Brace Yourself For Another Wild Month In Stock Markets

For the year, the Dow is down -6%, the S&P 500 is down just over -9%, and the Nasdaq has lost -14.7%. The previous record-holder is January 2009, an ugly moment for the economy, when the stock market fell -8.6%. In addition, the VIX – aka the CBOE Volatility Index – has actually dropped back to around 31 after topping 37 earlier this week, its highest point since November 2020.

Keep in mind, the index isn’t registering anywhere close to levels reached during other periods of “extreme” volatility. For example, the index, which is measured between zero and 100, hit its highest point of almost 83 during the financial crisis in 2008. Its most extreme point during the pandemic was around 66 in March 2020. So, by comparison, this week’s volatility has been rather mild.

Federal Reserve

Some insiders equate the wild swings in stock prices to investors, particularly “big money,” trying to establish a new baseline for stock valuations minus the Fed’s easy money policies that have driven a massive amount of cash into markets since the pandemic began in 2020.

At its height, the Fed was pumping as much as +$120 billion per month into the system via its asset purchase program, ballooning its balance sheet to now nearly $9 trillion.

At the same time, the Fed has held its benchmark rate at near-zero and, before that, hadn’t even attempted to raise rates since 2018, and then only briefly. The last full-cycle of rate hikes was 2015. What’s more, investors haven’t really had to factor for inflation since the early 90s and it hasn’t been this high since the 80s.

Bottom line, whatever the new “normal” ends up looking like, it will be dramatically different from the pre-pandemic investing landscape. I’ve heard several large stock traders saying it seems to be the return of Alpha instead of the race to levered Beta. I hear others on Wall Street referencing it to a bit of league recreational youth baseball team where everybody now gets an award simply for participation, but then kids run into a rude awakening when performance really starts to matter.

It feels like we are there in the stock market; every business that was coming into the market was simply being rewarded with participation points, now people are starting to keep a real scorebook and counting the strikeouts and runs scored.

Economy still roars

The good news is that the U.S. economy continues to roar. Historically, a combination of moderate inflation and moderate interest rates has led to some of the biggest boom times for U.S. Last week, the Commerce Department said Q4 Gross Domestic Product (GDP) grew at an annualized rate of +6.9%, stronger than Q3’s +2.3% and well above Wall Street expectations of around +5.7% growth.

Consumer spending climbed at a +3.3% annual pace led by a +4.7% increase in services spending. But the real stand out was private investment which rocketed +32% higher, boosted by a surge in business inventories as companies stocked up to meet higher customer demand. Rising inventories, in fact, contributed nearly +5% to Q4 GDP growth.

On the one hand, the inventory build is positive because it indicates an easing of supply chain dislocations that should in turn help with inflation pressures. On the other hand, many economists note that the big boost from retailer and wholesaler restocking is not likely to be repeated.

Companies will also likely start to unwind at least some of that inventory in the quarters ahead, which could drag overall 2022 GDP, especially if consumer spending also drops off. And investors are more closely tracking consumer behavior as inflation continues to rise.

With consumer spending accounting for about 70% of the U.S. economy, any signs that belts are tightening or moods are getting overly pessimistic will likely set off some alarm bells.

Data to watch

Turning to next week, it will be another busy one for both key economic data as well as earnings. The main economic data highlight will be the January Employment Situation on Friday. Other key data includes ISM Manufacturing, Construction Spending, and the JOLTS report on Tuesday; ADP’s private payrolls report on Wednesday; Productivity & Costs, Factory Orders, and the ISM Non-Manufacturing Index on Thursday.

Earnings wise, results are due from NXP Semiconductor and Trane on Monday; Advanced Micro Devices, Alphabet, Amgen, Chubb, Electronic Arts, Exxon, General Motors, Gilead Sciences, Match Group, PayPal, Sirius XM, Starbucks, and UPS on Tuesday; AbbVie, Aflac, Allstate, Boston Scientific, CNH, Corteva, D.R. Horton, Ferrari, Humana, Johnson Controls, Meta (Facebook), MetLife, Novartis, Novo Nordisk, Qualcomm, Siemens, Thermo Fisher, TMobile, and Waste Management on Wednesday; Activision Blizzard, Amazon, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, Snap, SnapOn, Wynn Resorts, and Xylem on Thursday; and BristolMyersSquibb, CBOE, Phillips 66, Regeneron, and Sanofi on Friday.

Bottom line, brace for another huge week of extreme volatility.

Wall Street Week Ahead Earnings: Alphabet, PayPal, Exxon Mobil, Meta, Qualcomm and Amazon in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion will hit the stock market hard next week, making the big tech earnings that much more critical. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of January 31

Monday (January 31)

TICKER COMPANY EPS FORECAST
CBT Cabot $1.06
CRUS Cirrus Logic $1.91
FN Fabrinet $1.28
HLIT Harmonic $0.09
NXPI NXP Semiconductors $2.67
PCH PotlatchDeltic $0.48
RYAAY Ryanair Holdings $-0.15
SANM Sanmina $0.91
TT Trane Technologies $1.31
WWD Woodward $0.83

 

Tuesday (February 1)

IN THE SPOTLIGHT: ALPHABET (GOOGLE), PAYPAL, EXXON MOBIL

ALPHABET: The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its fourth-quarter earnings of $26.71 per share, which represents year-over-year growth of about 20% from $22.3 per share seen in the same period a year ago.

The Mountain View, California-based internet giant would post revenue growth of nearly 27% to $72.133 billion from $56.9 billion a year ago. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

“Key Alphabet (GOOG) ’22 Ad Buyer Survey conclusions: i) Google Search remains highest ROI platform; ii) YouTube expected to gain ad share ’21-’23; & iii) GOOG Search & YouTube are the top platforms for ad buyers reallocating budget due to iOS changes. We est. GOOG’s share of WW Digital adv. (x-China) goes from 41% to 37% ’22-’27. We extended model to ’27, PT to$3,500 vs. prior $3,360, reiterate Outperform,” noted John Blackledge, equity analyst at Cowen.

PAYPAL: The digital payments company is expected to report its fourth-quarter earnings of $0.86 per share, which represents year-over-year growth of about 15% from $0.75 per share seen in the same period a year ago. The San Jose, California-based company would post revenue growth of over 12% to around $6.9 billion.

EXXON MOBIL: The oil company will see its earnings rise multi-fold in the fourth quarter thanks to higher energy prices and a waning pandemic that helped it bounce back after a tough period in 2020.

The Irving Texas-based company is expected to report its fourth-quarter earnings of $1.73 per share, which represents year-over-year growth of over 5,666%, up from $0.03 per share seen in the same period a year ago.

The U.S. largest publicly traded oil company is expected to report a 97.3% increase in revenue to $91.845 billion from $46.54 billion a year ago. On Dec 30, the Irving Texas-based company in its regulatory filing said that higher oil and gas prices would enable it to achieve annual profitability starting in 2021 with an operating profit increase of up to $1.9 billion.

The U.S. largest publicly traded oil company hinted that oil and gas earnings could decrease by up to $1.2 billion as a result of one-time charges for asset impairments and contractual costs. Exxon announced late last year announced that a sharply higher operating profit in oil and gas, prompting Credit Suisse, Scotiabank, and JPMorgan to raise their fourth-quarter earnings estimates.

“Improving FCF outlook and dividend sustainability. With a more constructive commodity price outlook, lower capital spending, and additional cash operating cost savings, the dividend is covered in 2021 and averages >100% over the next 5-years on our estimates. Improving dividend sustainability supports yield compression for Exxon Mobil (XOM) relative to CVX,” noted Devin McDermott, Equity Analyst and Commodities Strategist at Morgan Stanley.

“Cost cuts defend the dividend. In 2020, Exxon Mobil (XOM) reduced 2022-25 spending plans to $20-25B from $30-35B (recently extended to 2027), improving dividend sustainability while limiting further pull on the balance sheet. Additionally, Exxon Mobil (XOM) is targeting $6B in structural operating cost reductions by 2023 which should put upward pressure on consensus FCF estimates.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 1

TICKER COMPANY EPS FORECAST
AMD Advanced Micro Devices $0.69
AMCR Amcor $0.18
ASH Ashland Global Holdings $0.93
CTLT Catalent $0.79
CB Chubb $3.34
EA Electronic Arts $2.81
XOM Exxon Mobil $1.73
GM General Motors $0.84
NMR Nomura Holdings $0.2
SBUX Starbucks $0.8
UBS UBS Group $0.24
UPS United Parcel Service $3.05

 

Wednesday (February 2)

IN THE SPOTLIGHT: META PLATFORMS (FACEBOOK), QUALCOMM

META PLATFORMS (FACEBOOK): The world’s largest online social network is expected to report its fourth-quarter earnings of $3.78 per share, which represents a year-over-year decline of over 2% from $3.88 per share seen in the same period a year ago.

The Menlo Park, California-based social media conglomerate would post revenue growth of over 30% to around $33.04 billion. The social media giant has consistently beaten consensus earnings estimates in most of the quarters in the last two years, at least.

QUALCOMM: The world’s biggest mobile phone chipmaker is expected to report its fiscal first-quarter earnings of $2.77 per share, which represents a year-over-year decline of over 40% from $1.97 per share seen in the same period a year ago.

The chip manufacturer would post revenue growth of nearly 27% to $10.45 billion. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

Qualcomm forecasts GAAP revenue in the first quarter of fiscal 2022 to be between $10 billion and $10.8 billion. On a non-GAAP basis, earnings will likely range from $2.90 to $3.10 per share, while GAAP earnings will likely range from $2.53 to $2.73 per share, according to ZACKS Research.

“After underperforming the SOXX for most of 2021 until a sharp rally late in the year, we see a strong setup for a now Apple-overhang-free Qualcomm in 2022 as investors begin to appreciate the diverse revenue drivers beyond Wireless. Expect solid print and guide, with focus on execution and growth in the connected intelligent edge and update our estimates accordingly,” noted Matthew Ramsay, equity analyst at Cowen.

“We reiterate our price target of $210 based on 17.5x our F2023 EPS estimate of $12.0 and our Outperform rating.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 2

TICKER COMPANY EPS FORECAST
EAT Brinker International $0.5
CHRW C.H. Robinson Worldwide $1.85
CPRI Capri Holdings $1.67
CTSH Cognizant Technology Solutions $1.03
RACE Ferrari $1.08
FB Meta Platforms $3.78
MET MetLife $1.63
TMUS T-Mobile $0.2

 

Thursday (February 3)

IN THE SPOTLIGHT: AMAZON

The e-commerce leader for physical and digital merchandise, Amazon, is expected to report its fourth-quarter earnings of $3.9 per share, which represents a year-over-year decline of over 70% from $14.09 per share seen in the same period a year ago.

However, the Seattle, Washington-based multinational technology giant would post revenue growth of about 10% to around $138 billion. The company has beaten earnings per share (EPS) estimates most of the time in the two years.

“We are reiterating our BUY rating and our price target to $3,900. Our price target is based on our updated discounted cash flow model, including our long-term adj. EBITDA margin forecast of 22.0% versus 13.7% in 2020,” noted Tom Forte, MD, Senior Research Analyst at D.A. DAVIDSON.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 3

TICKER COMPANY EPS FORECAST
ABB ABB $0.38
ALL Allstate $2.72
COP ConocoPhillips $2.23
LLY Eli Lilly $2.37
HON Honeywell International $2.09
PRU Prudential Financial $2.44
SU Suncor Energy $0.95
SYNA Synaptics $2.63

 

Friday (February 4)

TICKER COMPANY EPS FORECAST
APD Air Products & Chemicals $2.51
AON Aon $3.33
BMY Bristol Myers Squibb $1.85
CBOE Cboe Global Markets $1.41
ETN Eaton $1.73

 

Why Eli Lilly Stock Is Up By 8% Today

Eli Lilly Stock Rallies After Company Publishes Guidance For 2022

Shares of Eli Lilly gained strong upside momentum today after the company updated outlook for this year and provided financial guidance for 2022.

In 2021, Eli Lilly expects to report revenue of $28 billion – $28.3 billion and adjusted earnings of $8.15 – $8.20 per share, compared to the previous estimate of $7.95 – $8.05 per share.

In the next year, Eli Lilly expects to report revenue of $27.8 billion – $28.3 billion and adjusted earnings of $8.50 – $8.65 per share. The guidance exceeded analyst consensus, providing significant support to the stock.

As Eli Lilly’s guidance highlighted  growth on the earnings front, traders rushed to buy the company’s shares and pushed Eli Lilly stock from the $250 level to the $270 level. All-time high levels near $276, which were reached back in August, are within reach.

What’s Next For Eli Lilly’s Stock?

At midpoint of its guidance, Eli Lilly expects to report adjusted earnings of $8.58 per share in 2022, so the stock is trading at roughly 31 forward P/E. This is not cheap, but Eli Lilly has shown strong growth, so the company’s valuation looks normal for the current market environment.

While Eli Lilly stock is up by roughly 60% year-to-date, it has a good chance to gain additional upside momentum and get to the test of all-time high levels after the release of strong guidance for the next year as the market remains hungry for growth.

I’d also note that Eli Lilly may attract growth-oriented traders and investors who want to diversify their portfolios and move some capital out of high-growth tech stocks ahead of rate hikes in 2022, which look inevitable at this point.

Healthcare-related stocks in general look well-positioned for such migration of capital in case the Fed sounds too hawkish today and traders begin to trim their positions in leading tech stocks in anticipation of a series of rate hikes in the next year.

For a look at all of today’s economic events, check out our economic calendar.

Eli Lilly Shares Jump Over 5% After It Raises Profit Estimates; Target Price $311 in Best Case

Eli Lilly shares surged over 5% in pre-market trading on Wednesday after the Indianapolis-based pharmaceutical giant raised its full-year 2021 profit and sales expectations ahead of the analyst meeting.

The company will host a meeting for the investment community today at 9:00 AM ET. The pharmaceutical company expects 2022 revenue to be between $27.8 billion and $28.3 billion, with key growth products driving two-thirds of core business revenue, excluding COVID-19 therapies; expects operating margin to be approximately 30% on a reported basis and approximately 32% on a non-GAAP basis, and expects earnings per share (EPS) to be in the range of $8.00 to $8.15 on a reported basis and $8.50 to $8.65 on a non-GAAP basis, the company said.

The company now expects 2021 revenue to be between $28.0 billion and $28.3 billion and EPS to be in the range of $6.18 to $6.23 on a reported basis and $8.15 to $8.20 on a non-GAAP basis.

“A newer product portfolio with good growth prospects on tap, in tandem with a handful of late-stage agents poised to launch over the next few years, give us confidence in Eli Lilly’s (LLY) above-average sales and EPS growth prospects,” noted Steve Scala, equity analyst at Cowen.

“While many key franchises are subject to competition, LLY has shown the ability to successfully navigate these challenges. Estimated 2021-27 EPS CAGR of 12% would appear above the industry average, and the dividend yield is attractive.”

Eli Lilly stock jumped 5.46% to $263.0 in pre-market trading on Wednesday. It surged over 47% so far this year.

Analyst Comments

“Lilly issued 2022 revenue guidance 1% above and EPS 5% above consensus due to higher-than-expected Revenues, other income and a slightly better-operating margin. Alz drug donanemab rolling submission is expected to complete by 1Q22. Lilly is hosting an investor call from 9:00 AM ET today,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“We are Overweight LLY shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth prospects. We project 2021e-2025e CAGR revenue +10% and EPS +18%. We see upside potential for pipeline candidate tirzepatide’s opportunity in obesity. Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Eli Lilly Stock Price Forecast

Nine analysts who offered stock ratings for Eli Lilly in the last three months forecast the average price in 12 months of $280.22 with a high forecast of $311.00 and a low forecast of $265.00.

The average price target represents a 12.37% change from the last price of $249.38. Of those nine analysts, seven rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $275 with a high of $321 under a bull scenario and $200 under the worst-case scenario. The firm gave an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also updated their stock outlook. Wells Fargo initiated with an “Equal-weight” rating and set the target price $270. Guggenheim lifted the target price to $272 from $268. Truist Securities increased the target price to $301 from $262.

Technical analysis suggests it is good to buy as 150-day Moving Average and 100-200-day MACD Oscillator signals a buying opportunity.

Check out FX Empire’s earnings calendar

Marketmind: Trillion-Dollar Tesla

LONDON (Reuters) – A look at the day ahead from Sujata Rao

The news was less cheerful from Facebook which is contending with whistleblowers and falling popularity among the young. But a $50 billion buyback plan, unveiled after market close, may be enough to lift the shares on Tuesday, especially if fellow tech titans Google, Microsoft and Twitter also post upbeat figures.

All in all, the global equity index is inching back towards the record highs hit early-September. U.S. stock futures pointing north for Tuesday and Japanese markets added 1.8%. In Europe, a surprise 9% profit boost at UBS — its highest in six years — could see the pan-European banking index rally further past April 2019 highs.

But the supply-chain snarl-ups, container traffic jams and chip shortages bedevilling companies worldwide show no signs of going away any time soon.

Just take carmaker Hyundai, which missed profit estimates and predicted that the chip shortages hampering output would take a long time to fix. And French car parts maker Faurecia saw Q3 sales drop 10% as semiconductor shortages forced its customers to cut production.

Then there is the prospect of central bank policy tightening, with the Bank of England looking set to join rate-hike club next month.

It all adds up to slower economic growth and earnings, Citi reckons. That could see buy-side analysts switching to net “downgrade” mode on stock recommendations for the first time since the pandemic first hit, it added.

And don’t forget China, where another developer Modern Land missed paying a bond due on Monday. Shanghai and Hong Kong shares fell, despite gains for EV firms.

Key developments that should provide more direction to markets on Tuesday:

-Philadelphia Fed Nonmanufacturing Business Outlook Survey

-U.S. monthly home prices Aug/consumer confidence Oct/new home sales Sept

-U.S. 2-year note auction

-Europe earnings: Norsk Hydro posts record Q3; Reckitt Benckiser ups full-year f’cast after upbeat Q3; Logitech sales rise on work-from-home boom

– -U.S. earnings: 3M, Corning, Eli Lilly, General Electric, Hasbro, Invesco, JetBlue, Lockheed Martin, S&P Global, United Parcel Service, Xerox, Google, Microsoft, Texas Instruments, Twitter, Visa

(For graphic on Tesla – https://fingfx.thomsonreuters.com/gfx/mkt/jnvwewzegvw/Pasted%20image%201635194081739.png)

(Reporting by Sujata Rao; editing by Karin Strohecker)

S&P 500, Dow Gain Amid Inflation Concerns, Debt Ceiling Debate

The S&P 500 index and the Dow Jones Industrial Average advanced, but the Nasdaq Composite closed lower as Treasury yields halted their ascent. Defensive sectors took the lead as investors sought stability in the volatile market.

All three remain on course to post monthly declines, with the bellwether S&P 500 snapping a seven-month winning streak.

“The same story we’ve seen for a couple of weeks,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.

“Investors are concerned about three things: the eventual taper of bond purchases by the Fed, ongoing inflation with Chairman Powell saying it’s going to stick around longer than initially expected, and the debt ceiling issue that congress is grappling with.”

Powell, speaking at a European Central Bank event, expressed frustration over persistent supply chain woes which could keep inflation elevated for longer than expected.

The stock market strengthened following his remarks.

“Powell has been very good at delivering the news officially that everyone knows is coming,” Pursche said.

Wrangling continued on Capitol Hill over funding the government as the Friday deadline to prevent a shutdown approached, with mounting concerns over a U.S. credit default.

U.S. Treasury yields paused after a runup in recent days as the debt ceiling debate unfolded in Washington.

The Dow Jones Industrial Average rose 90.73 points, or 0.26%, to 34,390.72; the S&P 500 gained 6.83 points, or 0.16%, at 4,359.46; and the Nasdaq Composite dropped 34.24 points, or 0.24%, to 14,512.44.

Of the 11 major sectors in the S&P 500, materials suffered the largest percentage drop, with utilities leading the way with a 1.3% gain.

Boeing Co provided the biggest lift to the Dow following China’s aviation regulator’s successful 737 MAX test. The planemaker’s shares rose 3.2%.

Discount retailer Dollar Tree Inc jumped 16.5% after increasing its buyback authorization by $1.05 billion to $2.5 billion.

Drugmaker Eli Lilly & Co gained 4.0% on Citigroup’s rating upgrade to “buy” from “neutral.”

Advancing issues outnumbered decliners on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and two new lows; the Nasdaq Composite recorded 38 new highs and 151 new lows.

Volume on U.S. exchanges was 11.42 billion shares, compared with the 10.45 billion average over the last 20 trading days.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Stephen Culp; Additional reporting by Devik Jain in Bengaluru; Editing by Richard Chang)

Eli Lilly Near Record High Ahead of Earnings; Target Price $300 in Best Case

Eli Lilly and Company, a pharmaceutical giant based in Indianapolis, is expected to report earnings of $1.93 per share, representing a year-over-year increase of over 2% from $1.89 per share a year ago.

The leading pharmaceuticals company would also post revenue growth of about 20% to $6.6 billion. According to ZACKS Research, the company has beaten earnings per share (EPS) estimates in two of the last four quarters.

Eli Lilly’s stock closed near an all-time high of $248.40 on Monday. The shares have gained over 45% so far this year.

Analyst Comments

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth prospects. We project 2021e-2025e CAGR revenue +8% and EPS +15%. We see upside potential for pipeline candidate tirzepatide’s opportunity in diabetes and obesity,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside. We view Eli Lilly’s (LLY) Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Eli Lilly Stock Price Forecast

Eleven analysts who offered stock ratings for Eli Lilly in the last three months forecast the average price in 12 months of $247.70 with a high forecast of $300.00 and a low forecast of $193.00.

The average price target represents a 0.45% change from the last price of $246.60. From those 11 analysts, 10 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $207 with a high of $248 under a bull scenario and $152 under the worst-case scenario. The firm gave an “Overweight” rating to the pharmaceutical company’s stock.

Several other analysts have also updated their stock outlook. Mizuho raised the target price to $250 from $216. Guggenheim lifted the target price to $258 from $246. Truist Securities upped the target price to $262 from $225.

Check out FX Empire’s earnings calendar

A Post-Covid Hangover – Should You Worry About Your Portfolio?

Amazon executives noted shifting consumer habits as the pandemic eases and people become more mobile. Amazon forecasted the next quarter’s sales at between $106 billion and $112 billion, compared to Wall Street expectations for right around $119 billion.

Amazon’s projections would still represent growth of +10% to +16%. Keep in mind, bears are also pointing to ongoing fears of supply chain hiccups, higher-trending inflation, and new coronavirus outbreaks. Earnings come at a busy pace again today with results from Caterpillar, Cerner, Chevron, CNH Industrial, Colgate Palmolive, Enbridge, Exxon Mobil, Johnson Control, and Procter & Gamble.

The worry on Wall Street is that this new normal rate of growth will be slower than many analysts and trading firms are forecasting coupled with higher inflation and or supply chain dislocations corporate profits could fall under some pressure or in this case be less than Wall Street is forecasting for the next few quarters. Bulls expect more consumer spending will shift from goods and pandemic-related services (delivery, video games, cloud/collaboration software) but are still betting on pent-up demand for things people missed out on during lockdowns, as well as goods and services that are currently in short supply.

Data to watch

Updated inflation data is also on tap with the ISM Manufacturing Index on Monday and the Services Index on Wednesday.

There will be plenty more earnings next week too, including Simon Properties and Zoom on Monday; Activision Blizzard, Alibaba, Amgen, Clorox, ConocoPhillips, Eli Lilly, Fidelity, Match Group, Monster Beverage, Occidental Petroleum, and Phillips 66 on Tuesday; Allstate, CVS, Etsy, General Motors, Kraft Heinz, Marathon Petroleum, MetLife, MGM Resorts, Rocket Companies, Roku, Trane, and Uber on Wednesday; Adidas, AMC, Carvana, Cigna, Cloudflare, Corteva, Duke Energy, Kellogg, Moderna, Nintendo, Novo Nordisk, Siemens, Square, Wayfair, Zillow, and Zoetis on Thursday; and Dish Network, Dominion Energy, and DraftKings on Friday.

Insider Accumulation

ES ##-## (Daily) 2021_08_01 (19_25_02)

I have mixed feelings about SP500. There are a few signs of weakness. However, it might be the result of low summer activity. Advance-Decline Line is clearly bearish. Insider Accumulation is also not that strong. Moreover, the Volatility Index is very low and potentially it could bring a pullback. In any case, SP500 futures failed to close the week above Gann resistance. And that is also a negative sign.

The Federal Reserve policy is still supportive. But keep in mind, that SP500 has rallied around 100% since the pandemic bottom without any pullback. And the retest of key support zones near 4200 and 4000 is realistic.

On the other hand, the continuation of the rally is also possible but only if price sustains above 4400. If that happens, bulls will target 4500 and 4600 in extension.

Why Eli Lilly Stock Is Up By 8% Today

Eli Lilly Stock Gains Ground As Its Alzheimer’s Drug Gets Nod From FDA

Shares of Eli Lilly gained upside momentum after the company revealed that its drug for treatment of Alzheimer’s disease (donanemab) received FDA’a Breakthrough Therapy designation.

Eli Lilly stated that it would submit a biologics licence application for donanemab under the accelerated approval pathway.

Alzheimer’s disease is a major problem that is growing fast as the population ages in developed countries. This year, potential treatments for this disease attract investors’ attention. Recently, FDA approved Biogen‘s Aduhelm (aducanumab), sending its shares from $280 to $460. Currently, Biogen’s stock has settled near $350.

What’s Next For Eli Lilly Stock?

Analysts expect that Eli Lilly will report earnings of $7.9 per share in 2021. It should be noted that analyst estimates for 2021 have been declining in recent months. In 2022, Eli Lilly is projected to report earnings of $8.6 per share so the stock is trading at 27 forward P/E.

I’d also note that Eli Lilly’s market capitalization exceeds $200 billion and it produces many drugs, so traders should not expect a market reaction similar to what we’ve seen in the case of Biogen.

At the same time, treatments for Alzheimer will likely grow into a strong market segment due to the severity of the disease and the fact that the number of patients with Alzheimer is expected to grow at a fast pace.

According to Eli Lilly, dementia due to Alzheimer’s disease is the most common form of dementia, and there are currently more than 50 million people living with dementia. The number of people suffering from dementia is projected to exceed 150 million by 2050.

While the current valuation at 27 forward P/E does not look very cheap, it is a reasonable valuation for the current market environment. Traders and investors will likely remain focused on the potential growth of the market for Alzheimer’s treatments, and Eli Lilly stock has decent chances to continue its upside move.

For a look at all of today’s economic events, check out our economic calendar.

Eli Lilly Profit Misses as Vaccines Sap U.S. Demand for COVID-19 Drugs

Demand for antibody drugs from Lilly and Regeneron has failed to take off in the United States, given the complexities associated with administering the treatments.

Sales of Lilly’s COVID-19 antibody drug, bamlanivimab, also came under pressure after the U.S. government stopped its distribution as a standalone treatment last month on worries that new variants of the virus could be resistant to it.

The drugmaker is now focusing on a combination of bamlanivimab with another treatment, etesevimab.

“COVID-19 therapies are reducing in their need as the virus is being arrested by vaccines in the United States,” Lilly’s Chief Executive Officer David Ricks said in an interview with CNBC.

Lilly earned $810.1 million from its COVID-19 drugs in the quarter, below estimates of $985 million, according to Guggenheim analysts. Lilly shares fell 4% in premarket trading.

The drugs, which include bamlanivimab as well as its combination with etesevimab, had brought in sales of $871.2 million in the fourth quarter.

The company now expects adjusted full-year earnings of $7.80 to $8 per share from its prior forecast of $7.75 to $8.40 per share.

Sales from COVID-19 drugs are expected in the range of $1 billion to $1.5 billion from $1 billion to $2 billion projected previously.

Excluding items, the company earned $1.87 per share, missing estimates of $2.13 per share, according to IBES data from Refinitiv.

Net earnings fell 7% to $1.36 billion, or $1.49 per share, in the quarter ended March 31.

(Reporting by Manas Mishra in Bengaluru; Editing by Shailesh Kuber and Anil D’Silva)

Eli Lilly Shares Gain Over 4% After Profit Beat; Target Price $225

Indianapolis-based pharmaceutical giant Eli Lilly and Company reported better-than-expected profit in the fourth quarter, led by solid demand for its cancer and diabetes drugs, sending its shares up over 4% in pre-market trading on Friday.

The leading pharmaceuticals company said its net earnings rose to $2.12 billion, or $2.32 per share, from $1.50 billion, or $1.64 per share, seen in the same period a year earlier. That was year-over-year growth of over 41% from the same quarter a year ago. Excluding items, Eli Lilly earned $2.75 per share, higher than the market expectations of $2.35 per share.

In the fourth quarter of 2020, worldwide revenue was $7.440 billion, an increase of 22% compared with the fourth quarter of 2019, driven by a 24% increase in volume and a 1% increase due to the favourable impact of foreign exchange rates, partially offset by a 4% decrease due to lower realized prices.

Eli Lilly shares rose over 4% to $219 in pre-market trading on Friday; the stock surged above 28% in 2020.

Eli Lilly Stock Price Forecast

Eleven analysts who offered stock ratings for Eli Lilly in the last three months forecast the average price in 12 months at $194.90 with a high forecast of $225.00 and a low forecast of $150.00.

The average price target represents a -7.24% decrease from the last price of $210.12. From those 11 analysts, eight rated “Buy”, three rated “Hold”, and none rate “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $190 with a high of $231 under a bull scenario and $143 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also recently commented on the stock. Berenberg raised the target price to $190 from $150. BofA Global Research upped the price objective to $225 from $195. Guggenheim increased the price objective to $210 from $186. Citigroup raised the stock price forecast to $210 from $146. Mizuho upped to buy from neutral and raised the target price to $222 from $164.

Analyst Comments

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth prospectsl. We project 2020e-2025e CAGR revenue +8% and EPS +12%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view LLY’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside and Downside Risks

Risks to Upside: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related newsflow), competing products disappoint, and compelling external action – highlighted by Morgan Stanley.

Risks to Downside: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s newsflow, competing drugs surprise on the upside, and drug pricing concerns increase.

Check out FX Empire’s earnings calendar

Eli Lilly Jumps After Alzheimer’s Drug Shows Positive Results

Eli Lilly and Company (LLY) shares rocketed 11.74% Monday after the Indianapolis-based drug manufacturer said its experimental Alzheimer’s drug significantly slowed the rate of decline in patients.

The treatment, called donanemab, showed effectiveness at slowing the decline of patients’ ability to think by 32% relative to a placebo in a mid-stage clinical study of 272 people conducted over two years. The drug works by removing a form of plaque known as beta-amyloid in an Alzheimer’s patient’s brain.

“This unique mechanism and antibody for clearing plaques, discovered at Lilly, has the potential to provide high levels of durable amyloid plaque clearance after limited dosing,” the company’s Chief Scientific Officer Daniel Skovronsky wrote in a statement, per Investor’s Business Daily. The company said it will undertake further studies in a 500-patient trial to gain additional insight into the drug’s effectiveness.

Through Monday’s close, Eli Lilly stock has a market capitalization of $177.87 billion and trades 10% higher on the year. Over the past month, the shares have gained 16.18%. From a valuation standpoint, the stock trades at around 20 times forward earnings, roughly in-line with its five-year earnings multiple.

Wall Street View

Cantor Fitzgerald’s Louise Chen said that the successful study was great news for the drugmaker. She added that the results pave the way for an application for regulatory approval. Elsewhere, sell-side research firms remain mostly bullish on the stock. It receives 11 ‘Buy’ ratings and 7 ‘Hold’ ratings. At this time, no analyst recommends selling the shares.

Price targets range from a Street-high $209 to a low of $149. The median 12-month price target of $190 represents a modest 2% premium to yesterday’s $185.94 close. Watch for additional re-ratings in the months ahead as further details emerge about the drug’s effectiveness and commercial application.

Technical Outlook and Trading Tactics

After breaking above an inverse head and shoulders pattern in December, the price formed a flag over the holiday season. However, yesterday’s news-driven breakout propelled the stock through key overhead resistance to a new all-time high (ATH) on heavy volume. Moreover, the 50-day simple moving average (SMA) recently crossed above the 200-day SMA to indicate a new uptrend is in place.

Given the relative strength index (RSI) sits in overbought territory, active traders should consider waiting for a retracement entry to the $170 level, where previous resistance now provides support. Those who take a long position in this area should protect capital with a stop-loss order placed beneath the flag pattern at $161.78. Book profits by using a target that is at least twice the amount of the stop used. For instance, target a $20 move if using a $10 stop.

For a look at today’s earnings schedule, check out our earnings calendar.

Eli Lilly to Buy Prevail Therapeutics in $1.04 Billion Deal, Shares Soar

Indianapolis-based pharmaceutical company Eli Lilly announced to acquire a biotechnology company Prevail Therapeutics in a deal worth $1.04 billion to expand its business in gene therapy, sending its shares up over 3% on Tuesday.

According to the deal, Lilly will commence a tender offer to acquire all outstanding shares of Prevail Therapeutics Inc. for a purchase price of $22.50 per share in cash. The deal is expected to close in the first quarter of 2021.

Following this announcement, Prevail shares surged about 90% to as high as $23.08.

Moreover, Eli Lilly forecasts next year’s revenue between $26.5-$28 billion and sales of nearly $1-$2 billion from its COVID-19 treatments. That would be largely driven by strong financial and operational performance in 2021, highlighted by volume-based revenue growth, operating margin expansion, pipeline advancements and solid cash flow.

Earnings per share (EPS) for 2021 are expected to be between $7.25 to $7.90 on a reported basis and $7.75 to $8.40 on a non-GAAP basis.

“Lilly issued 2021 revenue guidance 3% above and EPS in-line with consensus due to higher-than-expected R&D spending. Excluding COVID-19 therapy revenues, which are short duration, core revenue guidance is 3% above consensus,” said David Risinger, equity analyst at Morgan Stanley.

At the time of writing, Eli Lilly’s shares traded 3.01% higher at $162.67 on Tuesday; the stock is up over 20% so far this year.

Eli Lilly Stock Price Forecast

Ten equity analysts forecast the average price in 12 months at $172.80 with a high forecast of $200.00 and a low forecast of $144.00. The average price target represents a 7.08% increase from the last price of $161.38. From those 10 analysts, seven rated “Buy”, three rated “Hold” and none “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $170 with a high of $207 under a bull-case scenario and $121 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical’s stock.

Several other analysts have also upgraded their stock outlook. Guggenheim raised the stock price forecast to $183 from $178; Berenberg upped the target price to $150 from $144; Mizuho lowered the price objective to $156 from $164. Truist began coverage on Eli Lilly and set a “buy” rating and a $180 price objective. At last, JP Morgan boosted their price objective and to $200 from $190 and gave the stock an “overweight” rating.

Analyst Comments

“We are Overweight Eli Lilly shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR revenue +8% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” Morgan Stanley’s said Risinger added.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view Eli Lilly’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside and Downside Risks

Risks to Upside: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related newsflow), competing products disappoint, and compelling external action- highlighted by Morgan Stanley.

Risks to Downside: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s newsflow, competing drugs surprise on the upside, and Democratic election sweep causes drug pricing concerns.

Eli Lilly’s Baricitinib Gets FDA Approval for Emergency Use with Remdesivir to Treat COVID-19 Patients

Eli Lilly and Company, an American pharmaceutical company headquartered in Indianapolis, said its arthritis drug, baricitinib, in combination with Gilead Sciences Inc’s remdesivir, received an emergency use authorization from the U.S. Food and Drug Administration for the treatment of hospitalized patients with COVID-19.

The authorization is temporary and does not replace the formal review and approval process. In the U.S., baricitinib has not been approved by the FDA to treat COVID-19, and the efficacy, safety and optimal duration of treatment of baricitinib for COVID-19 has not been established. This is the first combination regimen authorized by FDA. Evaluation of baricitinib’s efficacy and safety as a treatment for COVID-19 is ongoing in clinical trials, the company said.

Eli Lilly shares closed 2.3% higher at $143.41 on Thursday; the stock is up about 10% so far this year.

Executive Comments

“Since the start of the COVID-19 pandemic, Lilly has been committed to finding potential treatments to help people around the world who’ve been impacted by this virus,” said David A. Ricks, Lilly chairman and CEO.

“Today’s FDA action for baricitinib marks the second Lilly therapy to be granted an EUA, in addition to the recent neutralizing antibody EUA for high-risk non-hospitalized patients, increasing the number of treatment options for COVID-19 patients at different stages of the disease. This is an important milestone for hospitalized patients on oxygen, as baricitinib may help speed their recovery.”

Eli Lilly Stock Price Forecast

Ten equity analysts forecast the average price in 12 months at $173.00 with a high forecast of $200.00 and a low forecast of $144.00. The average price target represents a 20.63% increase from the last price of $143.41. From those ten analysts, seven rated “Buy”, three rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $170 with a high of $207 under a bull-case scenario and $121 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also upgraded their stock outlook. Mizuho lowered their target price to $156 from $164. Bernstein started with market-perform rating; target price $150. Berenberg Bank initiated coverage and set a “hold” rating and a $144.00 price target. ValuEngine cut Eli Lilly and to a “sell” rating from a “hold”. At last, JP Morgan boosted their price objective to $200 from $190 and gave the stock an “overweight” rating.

Analyst Comments

“We are Overweight Eli Lilly shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR revenue +8% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view Eli Lilly’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects,” Risinger added.

Eli Lilly Says Antibody Lowers Risk of Hospitalization for Mild COVID-19 Patients

Eli Lilly and Company, an American pharmaceutical company headquartered in Indianapolis, said that its experimental antibody, LY-CoV555, reduces the rate of hospitalization for patients with mild or moderate symptoms of COVID-19, sending its shares up about 2% on Wednesday.

Of the total 302 patients treated with three different doses of LY-CoV555, five of them, or 1.7%, had to be admitted to a hospital or visit a hospital emergency room. That compares with a rate of 6%, or 9 out of 150, for trial patients given a placebo, the company said, Reuters reported.

Only the middle dose, 2,800 milligrams, achieved the trial’s main goal of reducing the amount of virus detected in patients compared to a placebo 11 days after treatment, it added.

“The results reinforce our conviction that neutralizing antibodies can help in the fight against COVID-19,” Daniel Skovronsky, Lilly’s chief scientific officer, said in a statement.

“We are grateful to the patients, physicians, and staff that have participated in this trial,” Skovronsky continued. “We look forward to continued data generation as this trial proceeds.”

Eli Lilly’s shares rose about 2% at 152.56 on Wednesday; also, the stock is up over 16% so far this year.

Eli Lilly stock forecast

Nine analysts forecast the average price in 12 months at $176.38 with a high forecast of $190.00 and a low forecast of $164.00. The average price target represents a 17.52% increase from the last price of $150.08. From those nine equity analysts, seven rated “Buy”, two rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave a target price of $176 with a high of $214 under a bull-case scenario and $125 under the worst-case scenario. Eli Lilly And Co had its price target boosted by stock analysts at Guggenheim to $185 from $182.

Other equity analysts also recently updated their stock outlook. Several other equity analysts have also updated their stock outlook. Mizuho lifted their price target on Eli Lilly And Co to $164 from $155.00 and gave the stock a “neutral” rating. UBS Group downgraded shares to “neutral” from “buy” but raised their price objective to $158 from $157. Cfra raised their price target to $167 from $146.00 and gave the stock a “hold” rating.

Analyst views

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR rev +9% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s ‘trifecta’ opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline news flow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view LLY’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside and Downside Risks

Upside: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related news flow), competing products disappoint, and compelling external action, highlighted by Morgan Stanley.

Downside: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s news flow, competing drugs surprise on the upside, and Democratic election sweep causes drug pricing concerns.

Eli Lilly’s Price Target Raised to $176 with Overweight Rating, $214 in Best Case: Morgan Stanley

Eli Lilly and Company’s, an American pharmaceutical company headquartered in Indianapolis, price target was raised to $176 from $157 with ‘Overweight’ stock rating, according to Morgan Stanley equity analyst David Risinger, who also said that they are bullish on prospects for Phase 3 diabetes asset tirzepatide and shares offer Alzheimer’s optionality.

On Thursday, the U.S. Food and Drug Administration approved two additional doses of Eli Lilly and Company’s Trulicity (dulaglutide), sending its shares up over 2% last week. The stock is up about 15% so far this year.

“We extended our model to 2025e, and our 2025e EPS is 7% above consensus. We project 5-year 2020e-2025e CAGR revision of 9% and EPS of 14%. Our 2025e revision of $36.2B is 7% above consensus $34.0 billion and EPS of $14.20 is 7% above cons’ $13.27,” Morgan Stanley’s Risinger said.

“Our 2025e operating margin of 40.0% compares to consensus’ 40.6%; we are slightly below based upon our assumption for greater reinvestment spending. Among Global Pharma, Lilly ranks among the fastest growers and has the least patent expirations over the next five years.”

Eli Lilly forecasts earnings per share for 2020 to be in the range of $6.48 to $6.68 on a reported basis and $7.20 to $7.40 on a non-GAAP basis. The leading pharmaceuticals company said they anticipate 2020 revenue between $23.7 billion and $24.2 billion.

Morgan Stanley target price under a bull-case scenario is $214 and $125 under the worst-case scenario. Eli Lilly And Co had its price target boosted by stock analysts at Guggenheim to $185 from $182.

Several other equity analysts have also updated their stock outlook. Mizuho lifted their price target on Eli Lilly And Co to $164 from $155.00 and gave the stock a “neutral” rating. UBS Group downgraded shares to “neutral” from “buy” but raised their price objective to $158 from $157. Cfra raised their price target to $167 from $146.00 and gave the stock a “hold” rating.

Nine analysts forecast the average price in 12 months at $176.38 with a high forecast of $190.00 and a low forecast of $164.00. The average price target represents a 16.88% increase from the last price of $150.91. From those nine, seven analysts rated ‘Buy’, two analysts rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR rev +9% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s ‘trifecta’ opportunity in diabetes, obesity, and cardiovascular health,” Morgan Stanley’s Risinger added.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view LLY’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside risks: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related newsflow), competing products disappoint, and compelling external action, highlighted by Morgan Stanley.

Downside risks: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s newsflow, competing drugs surprise on the upside, and Democratic election sweep causes drug pricing concerns.

Check out FX Empire’s earnings calendar