Eli Lilly (NYSE: LLY) is set to report its Q1 results on April 30, with analysts expecting $8.9 billion in sales and $2.46 in adjusted earnings per share. Investors are keeping an eye on the performance of the pharmaceutical giant’s diabetes drug Mounjaro and its weight-loss drug Zepbound. Eli Lilly’s stock has seen impressive gains over the past few years, outperforming the S&P 500 consistently. The company’s stock performance has been strong in recent years, with returns of 64% in 2021, 32% in 2022, and 59% in 2023, compared to 27% for the S&P 500 in 2021.
Despite the uncertain macroeconomic environment, Eli Lilly’s valuation is driven by its future pipeline potential rather than current earnings. Analysts have an average price target of $825 for the stock, over 10% above its current price of $730. In the previous quarter, the company saw a 28% year-over-year growth in revenue to $9.4 billion, driven by market share gains for drugs like Mounjaro, Verzenio, and Jardiance. Adjusted gross margin also expanded by 180 basis points to 82.3%, leading to a 19% growth in adjusted earnings to $2.49 per share.
Looking ahead to the latest quarter, Eli Lilly is expected to see continued sales growth driven by its newer products. Mounjaro sales are projected to rise over three times year-over-year to around $2 billion, while Verzenio sales are expected to surpass $1 billion. The company has set its 2024 sales forecast between $40.4 billion and $41.6 billion, with earnings per share projected to be in the range of $12.20 to $12.70, a significant increase from 2023. The company’s strong performance in the diabetes and obesity drug segments is expected to drive a robust quarter.
Although Eli Lilly’s stock has seen substantial gains in recent years, there is potential for even higher levels if the company raises its earnings outlook in the upcoming earnings report. It will be interesting to see how Eli Lilly’s peers in the pharmaceutical industry fare on key metrics compared to the company. For more value comparisons across industries, investors can look at Peer Comparisons. The Trefis High Quality Portfolio, consisting of 30 stocks, has consistently outperformed the S&P 500 in recent years, providing better returns with less risk.
