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Strength Seen in Lilly (LLY): Can Its 14.3% Jump Turn into More Strength?

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Eli Lilly (LLY - Free Report) shares rallied 14.3% in the last trading session to close at $839.96. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 12.2% loss over the past four weeks.

The sudden rise in the stock price was observed after Lilly announced positive topline results from the phase III ACHIEVE-1 study of orforglipron in adults with type 2 diabetes (T2D). The once-daily oral GLP-1 receptor agonist significantly reduced A1C levels by 1.3% to 1.6% over 40 weeks and helped more than 65% of patients on the highest dose reach A1C levels of 6.5% or lower. Patients also lost an average of 16 pounds (7.9%) at the highest dose, with weight loss still ongoing at study end. The drug demonstrated a favorable safety profile. Lilly plans to seek regulatory approval for weight management later this year and for T2D in 2026. The candidate is also being studied for obstructive sleep apnea and hypertension in adults with obesity.

This drugmaker is expected to post quarterly earnings of $4.44 per share in its upcoming report, which represents a year-over-year change of +72.1%. Revenues are expected to be $12.64 billion, up 44.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Lilly, the consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on LLY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lilly is part of the Zacks Large Cap Pharmaceuticals industry. Merck (MRK - Free Report) , another stock in the same industry, closed the last trading session 2% higher at $78. MRK has returned -18.7% in the past month.

Merck's consensus EPS estimate for the upcoming report has changed -4% over the past month to $2.16. Compared to the company's year-ago EPS, this represents a change of +4.4%. Merck currently boasts a Zacks Rank of #3 (Hold).


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