Eli Lilly Earnings Preview – (LLY) Stock Holds $800 Into Print After 30% Bounce

Eli Lilly stock (NYSE:LLY) has gained a little momentum after a tricky period for bulls, with the price having gained 6.62% on the month leading into earnings. This represents a 30% rally off August's lows, as the company has been driven forward by innovative partnerships, key acquisitions, and a dominant presence in the rapidly expanding anti-obesity drug market.

Markets are keenly anticipating the LLY Q3 earnings release before market open, with a consensus EPS estimate of $5.89. This represents a massive improvement on the $1.18 delivered this time last year, with revenue also set to soar. Expectations for sales growth of 40.48% would bring in revenue of $16.07billion on the period.

Price Targets

The stock's performance has generally been bullish, trading above both its 50-day ($770.00) and 200-day ($787.64) Simple Moving Averages. However, the markets will be carefully watching the earnings call for forward guidance and confirmation of the optimistic outlook.

Lilly's recent collaboration with Nvidia to develop a powerful AI supercomputer marks a significant step forward in accelerating drug discovery. This partnership, announced on October 28th, aims to leverage Nvidia's DGX SuperPOD systems to train advanced AI models capable of simulating and analyzing millions of potential drug interactions. By deploying these models through Lilly's TuneLab platform, the company expects to drastically reduce development timelines, enabling faster delivery of life-saving medications.

The applications extend beyond drug discovery to include manufacturing optimizations, advanced medical imaging, and the creation of intelligent enterprise AI agents. This move underscores the industry's growing recognition of AI as a critical tool for safer, quicker, and more cost-effective drug development, aligning with the FDA's initiatives to minimize animal testing.

On October 24th, Eli Lilly announced its acquisition of Adverum Biotechnologies for up to $261.7 million. This strategic move provides Lilly with access to Ixo-vec, Adverum's experimental gene therapy candidate currently in late-stage trials for treating wet age-related macular degeneration (wAMD). Ixo-vec offers a potentially revolutionary one-time injection treatment, a significant advantage over existing therapies that require frequent injections. Analysts project blockbuster potential for Ixo-vec, forecasting $1.3 billion in global sales by 2033, solidifying Lilly's commitment to innovative gene therapies.

Lilly's agreement with Cipla, announced on October 23rd, allows Cipla to market its popular weight-loss drug in India under the brand name Yurpeak. This partnership expands access to a crucial medication in a market with a growing need for effective weight management solutions. Lilly will continue to manufacture the drug, while Cipla will handle marketing and distribution, leveraging their established network and expertise in the Indian pharmaceutical market.

Eli Lilly's plan to invest over $1 billion in India to expand its manufacturing and supply chain capabilities demonstrates a commitment to meeting growing global demand for its key drugs. This initiative, announced on October 6th, will focus on increasing production and availability of medications for obesity, diabetes, Alzheimer's, cancer, and autoimmune diseases. The investment complements Lilly's larger $27 billion U.S. manufacturing expansion, highlighting a dual focus on domestic and international growth.

Eli Lilly is rapidly emerging as a dominant force in the anti-obesity drug market, projected to reach $150 billion by the end of the decade. With new dual-agonist injectable drugs demonstrating superior efficacy and tolerability in clinical trials, Lilly is poised to capture a significant share of this burgeoning market. While Novo Nordisk has long been a leader in this space, Lilly's innovative treatments and strategic market positioning are giving it a competitive edge.

With Eli Lilly having recaptured $800 earlier in the month, and recent action indicating support stepping in, there will be many eyeing upside resistance. $850 may act as a near term magnet on an upside move, with $875 having previously provided some friction. The guide and outlook is likely to prove pivotal to direction, with fundamentals pushing technicals aside at earnings time.