We discussed LLY in detail in a recent report around weight loss drugs but the U.S. pharmaceutical company failed to live up to expectations overnight with the stock falling 13%, its worst session in 26 years, after late-stage trial results of its oral obesity pill disappointed investors. That’s despite the pharmaceutical giant posting better-than-expected second-quarter results and raising its full-year outlook; there’s little doubt what the “hot money” has been focusing on:
- 2Q revenue of $15.56 billion was up 38% YoY, a 6% beat to consensus expectations of $14.67 billion.
- 2Q EPS of $6.31, a 61% increase from 2024, beating $5.59 expectations.
- Gross margin of 85% was up 3% YoY.
News of its weight loss pill falling behind its competitors failed to offset an upbeat second-quarter earnings report which showed revenue for its current weight-loss injectable Zepbound jumped well above Wall Street forecasts, i.e. the sector is still solid, you just need to be at the forefront.
- We can see value returning to LLY ~$US600, but are in no hurry to catch this falling knife.
MM is now neutral towards LLY
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