One of the leading players in large cap pharmaceuticals, Eli Lilly (LLY) — a profitable behemoth — released its third quarter results a month ago, reporting $6.9 billion in revenues, up 2.5% YoY, compared to $6.8 billion a year ago, observes Todd Shaver, editor of Bull Market Report.
The company posted a profit of $1.8 billion, or $1.98 per share, compared to $1.6 billion, or $1.77, with a marginal beat on the top and bottom lines during the quarter. Sales during the quarter were weighed down by currency headwinds, as the US dollar continued its ascent against global currencies.
The company continued to see robust growth in sales across core products and segments, starting with Trulicity, its diabetes therapy at $1.9 billion, up 18% YoY, followed by diabetes drug Jardiance at $570 million, an increase of 47% YoY. Another freshly introduced type 2 diabetes drug, Mounjaro hit sales of $190 million during its first quarter on the market, with plenty of markets and approvals in the pipeline.
Eli’s COVID-19 antibodies saw $390 million in sales, up 78% YoY, while its arthritis drug, Olumiant saw sales drop by 55% to $180 million. This was an eventful quarter when it comes to pipeline advancements, with the FDA fast tracking the company’s Tirzepatide for obesity treatment, and Moujaro receiving regulatory approvals for treating Type 2 diabetes in Japan and in the European Union.
Despite medium term challenges, the company remains on a fiery streak, with impenetrable fortresses across its core segments. In sharp contrast to the broader markets, the stock remains up by 38% YTD, and while the valuation of 12 times sales may seem excessive, it is perfectly justified given its robust pipeline.
The company ended the quarter with $2.8 billion in cash, $16 billion in debt, and $7.7 billion in cash flow. We love this stock and would never sell it. Our new Target is $425 which would put this market cap at about $410 billion.