Eli Lilly's Stock Movement and Strong Earnings Despite Misses

Eli Lilly reports robust earnings with a dip in Q3 estimates. With record sales of GLP-1 drugs, investors may find this pullback an opportunity. Despite challenges, the outlook remains bright for the pharmaceutical giant.

Date: 16-01-2025

AI Rating: 5

Earnings Per Share (EPS)
Lilly reported Q3 2024 EPS of $1.18, which was below consensus estimates by 27 cents. This miss may concern some investors, influencing stock price negatively. The miss could indicate pressure in maintaining earnings momentum despite significant revenue from its drug portfolio.

Revenue Growth
The company achieved a revenue increase of 20.4% YoY to $11.44 billion, though this also missed the consensus estimate of $12.09 billion. However, excluding the olanzapine portfolio's sales, revenue surged by 42% YoY, reflecting positive growth in other product segments and indicating strong demand for its current therapies.

Net Income
The analysis does not specify net income figures but notes significant IPR&D charges that impacted Q3 results. The one-time charge of $2.83 billion could weigh on net income and raises questions about the sustainability of profitability in the short term.

Profit Margins
Although net profit margins aren't directly stated, the large IPR&D charge suggests possible compression in profitability metrics. Investors may take this into account when evaluating profitability trends going forward.

Free Cash Flow (FCF)
No specific mention of free cash flow is included in the report, leaving this metric unassessed.

Return on Equity (ROE)
The report does not provide insights on return on equity, which is critical for assessing how effectively capital is utilized.

Overall, despite the mixed news with earnings, a strong sales performance in its GLP-1 drug portfolio and upcoming pipeline products suggest a long-term positive outlook for Lilly. The recent stock buyback initiative indicates management’s confidence in its future, although the short-term volatility could deter some investors.

Stocks: LLY NVO