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Should Eli Lilly (LLY) Be in Your Portfolio Ahead of Q1 Earnings?
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Eli Lilly and Company (LLY - Free Report) will report first-quarter 2024 results on Apr 30, before market open.
The Zacks Consensus Estimate for this drug giant’s first-quarter revenues is pegged at $8.81 billion, while the same for earnings per share is $2.53 per share, both indicating significant increases from the year-ago quarter.
In the first quarter, top-line growth is expected to have been driven by strong demand for Lilly’s new tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound. The Zacks Consensus Estimate for Mounjaro is $1.94 billion, while our model estimate is $1.86 billion.
Also, continued higher demand and volume growth for Lilly’s key growth drugs (select products launched prior to 2022 like Cyramza, Emgality, Jardiance, Olumiant, Retevmo, Taltz, Trulicity, Tyvyt and Verzenio) are likely to have provided top-line support. Particularly, Verzenio and Jardiance sales are expected to have been strong.
The Zacks Consensus Estimate for Verzenio is $1.11 billion, while our model estimate is $1.25 billion.
The Zacks Consensus Estimate for Jardiance is $701 million, while our model estimate is $670.7 million.
Newer products (products launched from 2022 onwards) like Ebglyss, Jaypirca and Omvoh are likely to have contributed to sales growth. However, sales of most established drugs like Alimta, Forteo, Humalog and Humulin are likely to have declined in the quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Lilly, with a market cap of more than $700 billion, boasts a wide range of products that serve a vast number of therapeutic areas. The company focuses primarily on diabetes, neuroscience, oncology and immunology, which are all high-growth areas and represent significant commercial potential. In 2023, its new drugs generated impressive sales. The company received approvals for more new drugs and witnessed pipeline and regulatory success. We believe the stock has the potential to rise further in 2024, with investor focus on the sales performance of Mounjaro and Zepbound.
Mounjaro and Zepbound include the same compound tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA). The GLP-1 segment is a very important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity. Zepbound was approved in November 2023 and launched in December. Mounjaro was approved in May 2022 and generated impressive sales of $3.86 billion in 2023, benefiting from strong demand trends. Zepbound generated sales of $175.8 million in 2023. Mounjaro and Zepbound are expected to be key top-line drivers for Lilly in 2024, with demand for weight loss drugs rising rapidly.
Lilly gained approvals for some other new drugs in 2023, like Omvoh for ulcerative colitis and BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia. Lilly expects its new drugs, Mounjaro, Omvoh, Zepbound, Ebglyss and Jaypirca, to contribute significantly to its top line in 2024. Label expansion studies are also going on to allow expansion of the eligible patient population for these drugs in the future.
A key asset in Lilly’s pipeline is donanemab for early Alzheimer’s disease, which is under review with the FDA. Though the drug recently faced a delay in approval, Lilly is optimistic about its potential. Data from studies have shown that donanemab produced a significant reduction of amyloid buildup in the brain and plasma phosphorylated tau (P-tau) in the blood. Amyloid plaque and P-tau are key biomarkers of Alzheimer's disease and their reduction is likely to predict clinical benefit in the treatment of early Alzheimer's disease.
Lilly also acquired a couple of clinical-stage biotechs in 2023, like POINT Biopharma, a maker of next-generation radioligand therapies for treating cancers, and DICE Therapeutics, a maker of IL-17 inhibitors to treat chronic diseases in immunology. The acquisitions strengthened its pipeline.
Lilly’s stock has risen 94.5% in the past year compared with an increase of 14.4% for the industry.
Image Source: Zacks Investment Research
Lilly’s stock has gone up by more than 500% in the past five years mainly due to its solid pipeline potential, particularly its obesity drugs. The only other large drugmaker to have generated such phenomenal returns is Novo Nordisk (NVO - Free Report) . The stock has risen 417% in the past five years, mainly on the success of its drug semaglutide, a direct competitor to Lilly’s tirzepatide medicines. Semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Despite supply challenges, Wegovy is seeing strong prescription trends and is generating impressive revenues and profits for Novo Nordisk.
Estimates for Lilly’s 2024 earnings have moved up from $12.42 to $12.52 and from $18.37 to $18.50 for 2025 over the past 30 days. Its trailing 12-month price-to-sales ratio has more than doubled to 19.75 now from around 9 in 2021. Its revenues have jumped from $28.3 billion in 2021 to $34.1 billion in 2023.
The factors mentioned above clearly show that Lilly enjoys strong fundamentals and is expected to consistently do well mainly supported by its new drugs and pipeline’s potential. Lilly is a good stock to hold on to, no matter how the first-quarter results play out and the stock’s reaction to the results. In fact, any major dip in the stock’s price can be used as an opportunity to buy the stock for long-term gains.
In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share have improved from 22 cents to 30 cents. Estimates for 2025 have increased from 32 cents to 50 cents. In the past year, shares of ADMA Biologics have risen 96.1%.
Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting the same once. ADMA delivered a four-quarter average earnings surprise of 85.0%.
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Should Eli Lilly (LLY) Be in Your Portfolio Ahead of Q1 Earnings?
Eli Lilly and Company (LLY - Free Report) will report first-quarter 2024 results on Apr 30, before market open.
The Zacks Consensus Estimate for this drug giant’s first-quarter revenues is pegged at $8.81 billion, while the same for earnings per share is $2.53 per share, both indicating significant increases from the year-ago quarter.
In the first quarter, top-line growth is expected to have been driven by strong demand for Lilly’s new tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound. The Zacks Consensus Estimate for Mounjaro is $1.94 billion, while our model estimate is $1.86 billion.
Also, continued higher demand and volume growth for Lilly’s key growth drugs (select products launched prior to 2022 like Cyramza, Emgality, Jardiance, Olumiant, Retevmo, Taltz, Trulicity, Tyvyt and Verzenio) are likely to have provided top-line support. Particularly, Verzenio and Jardiance sales are expected to have been strong.
The Zacks Consensus Estimate for Verzenio is $1.11 billion, while our model estimate is $1.25 billion.
The Zacks Consensus Estimate for Jardiance is $701 million, while our model estimate is $670.7 million.
Newer products (products launched from 2022 onwards) like Ebglyss, Jaypirca and Omvoh are likely to have contributed to sales growth. However, sales of most established drugs like Alimta, Forteo, Humalog and Humulin are likely to have declined in the quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Lilly, with a market cap of more than $700 billion, boasts a wide range of products that serve a vast number of therapeutic areas. The company focuses primarily on diabetes, neuroscience, oncology and immunology, which are all high-growth areas and represent significant commercial potential. In 2023, its new drugs generated impressive sales. The company received approvals for more new drugs and witnessed pipeline and regulatory success. We believe the stock has the potential to rise further in 2024, with investor focus on the sales performance of Mounjaro and Zepbound.
Mounjaro and Zepbound include the same compound tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA). The GLP-1 segment is a very important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity. Zepbound was approved in November 2023 and launched in December. Mounjaro was approved in May 2022 and generated impressive sales of $3.86 billion in 2023, benefiting from strong demand trends. Zepbound generated sales of $175.8 million in 2023. Mounjaro and Zepbound are expected to be key top-line drivers for Lilly in 2024, with demand for weight loss drugs rising rapidly.
Lilly gained approvals for some other new drugs in 2023, like Omvoh for ulcerative colitis and BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia. Lilly expects its new drugs, Mounjaro, Omvoh, Zepbound, Ebglyss and Jaypirca, to contribute significantly to its top line in 2024. Label expansion studies are also going on to allow expansion of the eligible patient population for these drugs in the future.
A key asset in Lilly’s pipeline is donanemab for early Alzheimer’s disease, which is under review with the FDA. Though the drug recently faced a delay in approval, Lilly is optimistic about its potential. Data from studies have shown that donanemab produced a significant reduction of amyloid buildup in the brain and plasma phosphorylated tau (P-tau) in the blood. Amyloid plaque and P-tau are key biomarkers of Alzheimer's disease and their reduction is likely to predict clinical benefit in the treatment of early Alzheimer's disease.
Lilly also acquired a couple of clinical-stage biotechs in 2023, like POINT Biopharma, a maker of next-generation radioligand therapies for treating cancers, and DICE Therapeutics, a maker of IL-17 inhibitors to treat chronic diseases in immunology. The acquisitions strengthened its pipeline.
Lilly’s stock has risen 94.5% in the past year compared with an increase of 14.4% for the industry.
Image Source: Zacks Investment Research
Lilly’s stock has gone up by more than 500% in the past five years mainly due to its solid pipeline potential, particularly its obesity drugs. The only other large drugmaker to have generated such phenomenal returns is Novo Nordisk (NVO - Free Report) . The stock has risen 417% in the past five years, mainly on the success of its drug semaglutide, a direct competitor to Lilly’s tirzepatide medicines. Semaglutide is approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Despite supply challenges, Wegovy is seeing strong prescription trends and is generating impressive revenues and profits for Novo Nordisk.
Estimates for Lilly’s 2024 earnings have moved up from $12.42 to $12.52 and from $18.37 to $18.50 for 2025 over the past 30 days. Its trailing 12-month price-to-sales ratio has more than doubled to 19.75 now from around 9 in 2021. Its revenues have jumped from $28.3 billion in 2021 to $34.1 billion in 2023.
The factors mentioned above clearly show that Lilly enjoys strong fundamentals and is expected to consistently do well mainly supported by its new drugs and pipeline’s potential. Lilly is a good stock to hold on to, no matter how the first-quarter results play out and the stock’s reaction to the results. In fact, any major dip in the stock’s price can be used as an opportunity to buy the stock for long-term gains.
Zacks Rank and Stock to Consider
Eli Lilly currently has a Zacks Rank #3 (Hold).
A better-ranked biotech stock is ADMA Biologics (ADMA - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share have improved from 22 cents to 30 cents. Estimates for 2025 have increased from 32 cents to 50 cents. In the past year, shares of ADMA Biologics have risen 96.1%.
Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting the same once. ADMA delivered a four-quarter average earnings surprise of 85.0%.