Eli Lilly, a pharmaceutical giant, reported Q1 earnings last Thursday with a solid beat on its top and bottom lines. The medical stock is finding support as it trades inside the buy zone from a recent entry.
Indianapolis-based Eli Lilly is trading above a 284 cup-base buy point, according to MarketSmith pattern recognition. The initial breakout in March saw the stock become extended shortly after moving above the buy point. But recently shares pulled back into the buy zone. Now the medical stock is above support at its 50-day moving average and remains in the buy zone, which tops out at 298.20.
Remember, the stock market is in a correction, so investors should avoid new stock buys. Strong performers such as Lilly are good ideas for watchlists right now.
After reporting earnings last Thursday, the stock rose more than 4% in strong volume. The relative strength line, an indicator of strength relative to the overall market, is pretty stable and has been inching near highs over the past several weeks.
LLY stock retook its 50-day moving average back in early March as shares were shaping the right side of the cup base. Shares are also well above their 200-day moving average.
Medical Stock: Eli Lilly Reports Q1 Earnings
On Thursday, Eli Lilly reported first-quarter earnings that exceeded analyst expectations. With several core products showing strength, along with its Covid-19 antibodies, Eli Lilly updated the 2022 EPS guidance to $8.15-$8.30 and raised revenue guidance to $28.8 billion-$29.3 billion.
Lilly reported first-quarter earnings per share of $2.62, which was up 63% year-over-year. The company's revenue came in at $7.81 billion, an increase of 15%. U.S. sales outperformed for Eli Lilly, climbing 31% to $5.17 billion. Eli Lilly's Covid antibodies made up roughly $1.47 billion in total revenue, up 81% year over year.
Meanwhile, a core product known as Trulicity led the way with $1.74 billion in sales for the quarter, up 20%. Trulicity is a medication used for the treatment of type 2 diabetes. Another key product, Jardiance, earned Eli $419.4 million in the first quarter, which is up 34% year over year.
"Lilly delivered another quarter of volume-driven revenue growth led by key products and anticipates 2022 to be an exciting year with several potential approvals and new pipeline events," said CEO David A. Ricks in the earnings statement. "We are well-positioned to help address health challenges in areas of significant unmet medical need, such as obesity, Alzheimer's disease and cancer."
