Eli Lilly and Co (LLY) Earnings Fail to Reward Bullish Options Traders

Eli Lilly and Co (LLY) options traders have been extremely optimistic of late

Apr 26, 2016 at 10:33 AM
facebook X logo linkedin


Eli Lilly and Co (NYSE:LLY) is down this morning, after the drugmaker's earnings came up short of the Street's consensus estimate. However, better-than-expected revenue and an upwardly revised full-year outlook appear to be limiting the damage, with LLY last seen off 1.3% at $76.97. If options traders had their druthers, though, the pharmaceutical stock would be sitting higher.

To put it simply, LLY's options pits have been brimming with positivity. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 6.24 calls for each put during the last two weeks. The corresponding call/put volume ratio sits just 7 percentage points from an annual high.

Underscoring this call bias is LLY's Schaeffer's put/call open interest ratio (SOIR) of 0.54. Not only does this indicate calls nearly double puts among options in the front three-months' series, it also outstrips just 13% of comparable readings taken in the past year.

It's more of the same among analysts. Of the 14 brokerages tracking LLY, nine have handed out a "strong buy" endorsement, compared to four "holds" and just one "strong sell" opinion. If that's not enough, the stock's consensus 12-month price target of $94.18 represents a roughly 22% premium to current trading levels.

Although Eli Lilly and Co (NYSE:LLY) is down this morning, the pharmaceutical stock has been fighting back since its mid-March annual low of $67.88, up 13%. Meanwhile, the drugmaker's animal health unit is making waves this morning after inking a deal with Aratana Therapeutics Inc (NASDAQ:PETX).

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI