Eli Lilly shares fall due to rising costs
2022.12.13 09:47
Eli Lilly shares fall due to rising costs
Budrigannews.com – Eli Lilly (NYSE:) shares are down in pre-open Tuesday after the Indiana-based drug goliath offered a more fragile than-anticipated EPS figure.
Today, Lilly provided guidance for 2023 that was lower than the typical analyst consensus. The company anticipates an adjusted EPS of $8.10 to $8.30 in 2023, which is significantly lower than the estimate of $9.13. The higher R&D expenses, which are anticipated to be between $8.2 and 8.4 billion, significantly exceed the consensus of $7.54 billion, are the cause of the lower-than-anticipated EPS guidance. On the other hand, revenue is anticipated to be between $30.3 billion and $30.8 billion, exceeding the consensus of $30.17 billion.
In a press release, Lilly stated that “this growth is expected to be partially offset by lower revenue for Alimta due to its loss of patent exclusivity, no anticipated revenue for Covid-19 antibody, and the continued negative impact of foreign exchange rates.”
In addition, the company stated that it expects to introduce up to four new medicines and reiterated its forecast for the year 2022.
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Following the less-than-expected report, shares initially lost 4% before regaining some of their gains.
According to BMO analysts, the guidance for 2023 exceeded revenue expectations, but the guidance for EPS is being held back by rising R&D costs.
“We are empowered with the organization’s above agreement figure. In a client note, they stated, “We expect numbers to rise for the following year.”
Analysts at Goldman Sachs added:
“We expect moderate weakness in the stock on the EPS guidance miss vs. GS/Cons and the implied lower margins for next year.” However, “investor focus is primarily on the topline growth outlook given the significant opportunity for Mounjaro/tirzepatide in diabetes/obesity,” according to the company’s website.
