Eli Lilly & Co. (LLY) shares popped at 9% to breach $268.09 on Wednesday after the pharmaceutical company reported strong second-quarter financial results attributed to growth across core businesses.
Revenue in the quarter was up 23% year-over-year to $6.74 billion and better than analysts’ consensus of $6.65 billion. (See LLY stock charts on TipRanks)
Revenue growth was partly driven by a 22% increase in volume and the impact of favorable foreign exchange rates. Revenue from all “key growth products” was up and contributed to 17% growth in total revenue. “Key growth products” accounted for 54% of total revenues.
Earnings per share were up 29% from the year-prior period to $1.87 but fell short of consensus estimates of $1.92. Operating income in the quarter increased to $1.40 billion from $1.197 billion in the same quarter last year. The increase was mostly driven by a higher gross margin and lower research and development charges.
According to CEO David A. Ricks, Eli Lilly succeeded in accelerating the use of its new medicines around the world in the quarter characterized by sequential growth.
“We continue to increase investment in our future and look forward to several additional pipeline events in the second half of the year, along with the continued strengthening of our business,” said Ricks.
Following the solid Q2 results, Mizuho Securities analyst Vamil Divan has reiterated a Buy rating on the stock with a $279 price target implying 4% upside potential to current levels. According to the analyst, key growth drivers such as Trulicity beat consensus estimates.
“The overall results, however, were skewed positively by the divestiture of Cialis sales in China and negatively by lower sales of their COVID-19 antibodies and higher SG&A and taxes in the quarter,” said Divan.
Consensus among analysts is a Strong Buy based on 10 Buys and one Hold. The average Eli Lilly price target of $260.40 implies 2.84% downside potential to current levels.
LLY scores 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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