To The Moon

$Eli Lilly(LLY)$ 🧠📈🚀 Unveiling Q2 2025’s EPS Titans: Can Eli Lilly Soar Above the Pack? 🚀📈🧠

🎯 Executive Summary:

I’m convinced that Eli Lilly (LLY) emerges as the standout contender among the top 20 stocks poised for higher Q2 2025 EPS, with earnings slated for August 7. Analysts forecast an EPS of $3.25, a staggering 28% year-over-year (YoY) surge, driven by blockbuster sales of Mounjaro and Zepbound amid a global obesity treatment boom. This performance aligns with a broader pharmaceutical renaissance, fueled by innovative pipelines and institutional inflows, with LLY seeing a 7% uptick in hedge fund ownership in Q2. This isn’t just an earnings beat, it’s a structural shift in healthcare profitability.

💰 Financial Performance Breakdown:

Eli Lilly’s Q2 2025 projections are robust. Revenue is expected at $11.2 billion, up 22% YoY, propelled by a 35% increase in GLP-1 drug sales to $6.8 billion. Adjusted EPS is forecasted at $3.25, exceeding last year’s $2.54 by 28%, with GAAP EPS likely at $2.90, beating consensus by 5%. Net income is projected at $6.1 billion (+25% YoY), supported by a 30% FCF rise to $4.5 billion. The diabetes and obesity segment alone grew 40% QoQ, outpacing peers, with operating margins expanding to 38% from 35%.

🛠️ Strategic Headwinds & Execution Risk:

Challenges loom. Intensifying competition from Novo Nordisk’s Wegovy and regulatory scrutiny over pricing could cap upside, with potential Medicare negotiation pressures looming. R&D capex spiked 15% YoY to $2.3 billion, risking overextension if pipeline trials falter. However, reaffirmed 2025 guidance of $13.50-$14.00 EPS and a 95% trial success rate in recent updates bolster confidence in execution.

🧠 Analyst & Institutional Sentiment:

Analyst optimism is palpable. Morgan Stanley raised its price target to $1,050 (implied upside 12%) with an Overweight rating, while JPMorgan set a $1,020 target (8% upside) with a Buy. The average target is $1,012.56, with a high of $1,100 and low of $950, reflecting bullish consensus. ETF inclusion in $XLV (Health Care Select Sector SPDR) drives visibility, with call/put flow at 3:1 bullish. Institutional ownership climbed to 72%, with insider purchases up 10% QoQ.

📉📈 Technical Setup:

LLY’s chart signals strength. Support lies at $920 (50DMA), with resistance at $980 (21EMA) recently tested. RSI sits at 65, nearing momentum territory, while MACD shows a bullish crossover at 0.75. A bull flag pattern targets $1,050 (base) and $1,100 (stretch). Bollinger bands tighten, suggesting an imminent breakout, with volume averaging 1.8 million shares, 20% above the 50-day norm.

🌍 Macro & Peer Context:

In a 4.5% Fed rate environment, healthcare shines as a defensive growth sector, with LLY outpacing $NVO (down 5% YTD) and $AMGN (flat) on revenue CAGR (18% vs. 10% sector average). Geopolitical supply chain shifts favor U.S.-based pharma, with $XLV seeing $300 million inflows in July. Peers like $MRK (Merck) trail at 11% YTD, underscoring LLY’s leadership.

📊 Valuation & Capital Health:

LLY trades at a forward P/E of 38x, above the sector’s 32x, but a PEG of 1.3 justifies growth. EV/EBITDA is 25x (vs. 22x peer average), with price-to-FCF at 35x reflecting premium status. Cash reserves hit $8 billion, with debt at $15 billion (CET1 ratio 18%), and FCF yield at 2.8%. Projections see EPS hitting $15.00 by Q4 2025.

⚖️ Verdict & Trade Plan:

Buy LLY. Enter at $970-$980, with a stop-loss at $920. Target $1,050 (base) and $1,100 (stretch), confirmed by a volume surge above 2 million or a retest of $980. Catalysts include the August 7 earnings call and pipeline updates on September 10.

🏁 Conclusion:

This isn’t merely an earnings play. It’s a pharmaceutical juggernaut redefining profitability, and I see the market catching up to its potential.

📌 Key Takeaways:

- EPS: $3.25, +28% YoY, beat consensus $3.09 by 5%.

- Revenue: $11.2B, +22% YoY, GLP-1 sales $6.8B (+35%).

- Analyst PT: Morgan Stanley $1,050, Overweight; JPMorgan $1,020, Buy.

- YTD: +25%, outpacing $NVO (-5%) and $AMGN (0%).

- Technical: Bull flag targets $1,050, RSI 65, MACD bullish.

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@Tiger_Earnings