BofA On Eli Lilly: Disappointing Q3 Comes In Otherwise Strong 2020

Eli Lilly And Co’s LLY third-quarter results show the persisting impact of COVID-19 and pricing headwinds, according to BofA Securities.

The Eli Lilly Analyst: Geoff Meacham maintained a Buy rating on Eli Lilly with a $180 price target. 

The Eli Lilly Thesis: The downbeat third-quarter results could exert pressure on the company’s stock, Meacham said in the note.

Eli Lilly missed both top- and bottom-line estimates for the quarter.

In the third quarter, the company “saw an impact from pricing pressures (+5% sales growth, +9% volume growth) particularly with Trulicity and increased expenses (+9% y/y), which was driven by COVID-19 development expenses ($125M),” the analyst said.

Lilly's year-to-date growth “still remains strong / differentiated which is a key part of the story, with revenues growing +6% (driven primarily by volume growth),” he said. 

Lilly maintained the 2020 guidance for revenue and non-GAAP earnings, “assuming a rebound in healthcare activity and modest pricing headwinds from patient affordability programs and changes in segment mix,” Meacham said. 

LLY Price Action: Shares of Eli Lilly were down 6.14% at $133 at last check Tuesday.

Posted In: BofA SecuritiesGeoff MeachamAnalyst ColorEarningsNewsHealth CarePrice TargetReiterationAnalyst RatingsMoversTrading IdeasGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.