We’re raising our price target on Eli Lilly as the obesity-drug boom rolls on Eli Lilly shares are rallying to a new record high on Thursday after the drugmaker delivered another beat-and-raise quarter, driven by resilient momentum in its obesity drug business.
The numbers continue to impress and solidify the stock’s place in our portfolio
Revenue in the third quarter rose 39% year over year to $24.4 billion, surpassing the LSEG consensus of $22.6 billion. Adjusted earnings per share (EPS) increased 6.6% from a year ago to $7.48, exceeding analyst expectations of $6.26, according to LSEG data. The modest annual growth in adjusted profit was due to a sizable, acquisition-related accounting charge booked in the September quarter.
That’s an easy thing to accept because Lilly is wise to spend its GLP-1 windfall on potential growth drivers in the coming years. Adjusted gross margin in the September quarter came in at 84.4%, beating the 82.7% consensus, according to FactSet. It also expanded from 83.6% in the year-ago period, an encouraging sign of profitability.