Eli Lilly’s Q3 Earnings Miss but Revenues Beat Estimates


American pharmaceutical company Eli Lilly and Company (LLY) has posted lower-than-expected earnings for the third quarter of 2021. However, revenues surpassed analysts’ expectations on the back of robust revenue from COVID-19 therapies. The company has also updated its guidance for 2021.

Following the news, shares of the company rose 1.3% to close at $248.44 on Tuesday.

The company recorded adjusted earnings per share (EPS) of $1.94, falling short of the consensus estimate of $1.96 per share. LLY had reported earnings of $1.41 per share in the same quarter last year.

Total revenues generated during the quarter stood at $6.77 billion, up 18% year-over-year, and beat the Street’s estimate of $6.6 billion. Volume growth of 17% acted as a tailwind.

Notably, key growth products including, Trulicity, Taltz, Verzenio, Jardiance, Emgality, Olumiant, Tyvyt, Retevmo and Cyramza, contributed 17% towards revenue growth and constituted 58% of the total revenue during the quarter, excluding revenue from COVID-19 therapies.

Pipeline Update & Guidance

The CEO of Eli Lilly, David A. Ricks, said, “With numerous positive pipeline events this quarter, we have the potential to continue to expand the number of patients we serve through new indications for both Verzenio and Jardiance. We also progressed innovative, potential best-in-class treatment options in areas with high unmet need through a regulatory submission for tirzepatide in diabetes, the initiation of a rolling submission for donanemab in early Alzheimer’s disease, the submission of Jardiance in HFpEF, and positive Phase 3 results for lebrikizumab in patients with atopic dermatitis.” (See Eli Lilly stock charts on TipRanks)

For 2021, the company expects adjusted EPS to be in the range of $7.95 to $8.05 against the consensus estimate of $6.80.

Additionally, revenue is forecast to be between $27.2 billion and $27.6 billion, up from the prior range of $26.8 billion to $27.4 billion. This increase reflects additional revenue from COVID-19 antibodies and the underlying core business. Notably, revenue from COVID-19 antibodies is expected to be around $1.3 billion.

Analysts Recommendation

Following the third-quarter results, Mizuho Securities analyst Vamil Divan maintained a Buy rating on the stock but decreased the price target to $272 (7.45% upside potential) from $279.

Divan said, “We remain bullish on LLY shares, and on donanemab and tirzepatide in particular, but lower our near-term donanemab estimates.”

“With Lilly expecting donanemab accelerated approval in 2H22 and given the lackluster launch of Biogen’s Aduhelm, we are lowering our near-term donanemab sales forecast, and are specifically lowering our 2022 estimate from $60 million to $10 million,” the analyst added.

Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on 11 unanimous Buy. The average Eli Lilly price target stands at $281.91 and implies upside potential of 11.6%.

Smart Score

Eli Lilly scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. (See Top Smart Score Stocks on TipRanks >>)

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