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Eli Lilly: Analysts’ Recommendations in August

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Second-quarter performance

In the second quarter, Eli Lilly (LLY) reported revenues of ~$6.4 billion due to the solid uptake of its recently launched products Verzenio, Basaglar, Trulicity, and Taltz. The new products contributed ~28% of Eli Lilly’s total revenues and 31% of the Human Pharma segment’s revenues in the second quarter. The products helped offset the negative revenue impact due to the loss of patent exclusivities for Eli Lilly’s older products. The recently launched pharmaceutical products reported volume growth close to 9% YoY (year-over-year), while the new diabetes products had 31% YoY volume growth in the US market.

Excluding the impact of foreign currency fluctuations on international inventories, Eli Lilly witnessed an expansion in its non-GAAP operating margin in the second quarter, which was close to 30.6%—a YoY increase of ~590 basis points.

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Eli Lilly also witnessed multiple favorable regulatory events in 2018. On June 1, the company secured FDA approval for Olumiant in rheumatoid arthritis indication and launched the drug in the United States. The company filed an application, in the United States and the European Union seeking approval for its nasal glucagon as a hypoglycemia therapy in diabetes patients treated with insulin.

Analysts’ recommendations for Eli Lilly

Of the 18 analysts covering Eli Lilly in August, three recommended a “strong buy,” six recommended a “buy,” and nine recommended a “hold.” Wall Street analysts have projected the 12-month consensus target price for Eli Lilly to be ~$96.9, which would be a decline of ~5.5% over the company’s closing price on August 6.

Analysts’ recommendations for Eli Lilly’s peers

Of the 20 analysts covering Bristol-Myers Squibb (BMY) in August, ~35.0% recommended a “buy.” About 73.7% of the 19 analysts covering Merck (MRK) recommended a “buy,” while 52.4% of the 21 analysts tracking Pfizer (PFE) recommended a “buy.”

Next, we’ll discuss Eli Lilly’s revenue growth prospects.

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