Shares of Eli Lilly (LLY) are down 5% after rival Novo Nordisk (NVO) lowered its forward guidance.
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NVO stock is down 22% at midday on July 29 after the European pharmaceutical giant lowered its full-year sales and profit guidance and announced a new CEO. Novo Nordisk said it expects weaker sales of weight-loss drug Wegovy and its Ozempic diabetes treatment in America during this year’s second half.
The lowered guidance comes as Novo Nordisk struggles to keep pace with rival Eli Lilly, which makes competing obesity and diabetes drugs Mounjaro and Zepbound. At the same time, Novo Nordisk announced the appointment of Maziar Mike Doustdar, an internal candidate, as its new CEO following the ouster of Lars Fruergaard Jørgensen in May of this year.
Upcoming Earnings
The downwardly revised guidance and new CEO appointment come ahead of Novo Nordisk’s second-quarter financial results that are scheduled to be released on August 6. Wall Street is bracing for a bad print from Novo Nordisk following its downwardly revised guidance.
The situation at Novo Nordisk also appears to have shaken confidence in Eli Lilly ahead of its second-quarter financial results that are scheduled for release on August 7. While many analysts have been upgrading LLY stock ahead of its Q2 print, investors seem to be rattled by Novo Nordisk’s guidance cut, which has raised questions about weight-loss drug demand, particularly in the U.S.
Eli Lilly will have to reassure nervous investors with its upcoming financial results.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 18 Wall Street analysts. That rating is based on 16 Buy and two Hold recommendations issued in the last 12 months. The average LLY price target of $1,030.14 implies 34.16% upside from current levels.
