Why Eli Lilly Stock rose as much as 5.1% today and then gave up its gains

Shares of Eli Lilly (NYSE: LLY) rose as much as 5.1% on Tuesday. However, as of 11:37 a.m. ET, big pharma stocks were down 0.5%.

The first spike came after Lilly announced its fourth-quarter and full-year 2023 results. The company reported fourth-quarter revenue of $9.35 billion, up 28% year over year. This result was well above the average analyst revenue estimate of $8.93 billion.

Lilly posted fourth-quarter earnings of $2.19 billion, or $2.42 per share, based on generally accepted accounting principles (GAAP). Non-GAAP (adjusted) earnings for the quarter were $2.25 billion, or $2.49 per share. Wall Street’s consensus estimate was for non-GAAP earnings of $2.22 per share.

Was there anything investors didn’t like about Lilly’s update?

Since Lilly gave up its solid gains from earlier Tuesday morning, you might wonder if there was something investors didn’t like in the company’s Q4 update. That turned out not to be the case.

No one could complain about Lilly’s most high-profile growth promoter, the type 2 diabetes drug Mounjaro, and its sister product, the weight-loss drug Zepbound. The company also had six other drugs with double-digit sales growth in the fourth quarter: Verzenio, Taltz, Jardiance, Olumiant, Tyvyt and Retevmo.

Lilly gave full-year 2024 revenue guidance of between $40.4 billion and $41.6 billion. This midpoint of this range reflects year-over-year growth of almost 21%. It’s also higher than the average analyst revenue estimate of $39.4 billion.

Is Lilly a good stock to buy now?

I wouldn’t put too much stock in Lilly’s spins on Tuesday. Big spikes are sometimes followed by immediate sell-offs. In the long run, none of it matters.

Is Lilly a good stock to buy now for…

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