Eli Lilly Shares Jump Over 5% After It Raises Profit Estimates; Target Price $311 in Best Case

Eli Lilly shares surged over 5% in pre-market trading on Wednesday after the Indianapolis-based pharmaceutical giant raised its full-year 2021 profit and sales expectations ahead of the analyst meeting.

The company will host a meeting for the investment community today at 9:00 AM ET. The pharmaceutical company expects 2022 revenue to be between $27.8 billion and $28.3 billion, with key growth products driving two-thirds of core business revenue, excluding COVID-19 therapies; expects operating margin to be approximately 30% on a reported basis and approximately 32% on a non-GAAP basis, and expects earnings per share (EPS) to be in the range of $8.00 to $8.15 on a reported basis and $8.50 to $8.65 on a non-GAAP basis, the company said.

The company now expects 2021 revenue to be between $28.0 billion and $28.3 billion and EPS to be in the range of $6.18 to $6.23 on a reported basis and $8.15 to $8.20 on a non-GAAP basis.

“A newer product portfolio with good growth prospects on tap, in tandem with a handful of late-stage agents poised to launch over the next few years, give us confidence in Eli Lilly’s (LLY) above-average sales and EPS growth prospects,” noted Steve Scala, equity analyst at Cowen.

“While many key franchises are subject to competition, LLY has shown the ability to successfully navigate these challenges. Estimated 2021-27 EPS CAGR of 12% would appear above the industry average, and the dividend yield is attractive.”

Eli Lilly stock jumped 5.46% to $263.0 in pre-market trading on Wednesday. It surged over 47% so far this year.

Analyst Comments

“Lilly issued 2022 revenue guidance 1% above and EPS 5% above consensus due to higher-than-expected Revenues, other income and a slightly better-operating margin. Alz drug donanemab rolling submission is expected to complete by 1Q22. Lilly is hosting an investor call from 9:00 AM ET today,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“We are Overweight LLY shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth prospects. We project 2021e-2025e CAGR revenue +10% and EPS +18%. We see upside potential for pipeline candidate tirzepatide’s opportunity in obesity. Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Eli Lilly Stock Price Forecast

Nine analysts who offered stock ratings for Eli Lilly in the last three months forecast the average price in 12 months of $280.22 with a high forecast of $311.00 and a low forecast of $265.00.

The average price target represents a 12.37% change from the last price of $249.38. Of those nine analysts, seven rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $275 with a high of $321 under a bull scenario and $200 under the worst-case scenario. The firm gave an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also updated their stock outlook. Wells Fargo initiated with an “Equal-weight” rating and set the target price $270. Guggenheim lifted the target price to $272 from $268. Truist Securities increased the target price to $301 from $262.

Technical analysis suggests it is good to buy as 150-day Moving Average and 100-200-day MACD Oscillator signals a buying opportunity.

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