Eli Lilly Reports Earnings Tomorrow. Heres What to Expect. – Barron’s

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The drugmaker Eli Lilly has struggled this year, with the stock down 6.7% in 2019. That is well behind the broader S&P 500 health-care sector, which is up 6%, and the broader S&P 500, which is up 19.9% since the start of the year.

The company will make its case on Wednesday morning when it unveils its third-quarter earnings. Lilly has scheduled a conference call for 9 a.m. ET.

The earnings report comes weeks after a double-dose of good news for Eli Lilly (ticker: LLY). Earlier this month, the Food and Drug Administration approved the companys migraine drug Reyvow, and the company unveiled positive data on its drug Taltz in pediatric patients with plaque psoriasis, all in the space of two days.

Eli Lilly stock trades at 16.9 times its estimated earnings over the next 12 months, slightly below its five-year average of 19.8 times earnings.

Heres a snapshot of investors expectations and recent history.

Wall Street analysts expect earnings of $1.39 per share in the third quarter, according to FactSet, and sales of $5.5 billion.

In a note out October 18, J.P. Morgan analyst Chris Schott wrote that he expected growth on the sale of core products. Strong product trends continue despite competition, Schott wrote.

The companys anti-inflammatory drug Taltz is facing an increasingly crowded field, including AbbVies (ABBV) new drug Skyrizi and other drugs from Novartis (NVS), Celgene (CELG). Still, Schott wrote that Taltz has shown relatively healthy performance despite the Skyrizi launch.

On October 16, Bank of America Merrill Lynch analyst Geoff Meacham issued a Buy rating on Lilly, writing that he viewed the risk/reward profile in Lilly as compelling, and setting a $133 price target on the stock.

The company has reported some promising data in recent months, including a strong response rate for its drug LOXO-292 in some lung cancer patients, and the data on Taltz in pediatric patients with plaque psoriasis.

In July, Lilly reported earnings per share of $1.50, beating Wall Street expectations of $1.45 just slightly. The company attributed the beat to an increase in volume.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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Eli Lilly Reports Earnings Tomorrow. Heres What to Expect. - Barron's