Eli Lilly Stock Hits New Highs Despite Earnings Miss

Sales for the company's diabetes drug rose 25%

Deputy Editor
Aug 3, 2021 at 12:43 PM
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The shares of Eli Lilly And Co (NYSE:LLY) are up 4.1% at $256.69, after the company reported second-quarter earnings of $1.87 per share, which fell slightly below analysts' estimates. The firm said regulatory actions in the U.S. caused demand for its Covid-19 therapy to weaken. LLY also lowered its sales forecast for the therapy. However, it did also note sales of its diabetes drug Trulicity rose 25% during the quarter to $1.54 billion, which could be the catalyst for today's jump.

In fact, LLY is trading at a record high this morning, breaking past recent pressure at the $248 level. The stock saw a brief pullback to the 30-day moving average before charging higher late last month, and now Eli Lilly stock sports a 68.4% year-over-year lead. 

Despite this recent positive price action, short term option traders have rarely been more put-biased. This is per LLY's Schaeffer's put/call open interest ratio (SOIR) of 1.31, which stands higher than 92% of readings from the past 12 months. 

Conversely, analysts have been incredibly optimistic. Of the 11 in coverage, nine say "strong buy." The 12-month consensus price target of $240.50, meanwhile, is a 6.3% discount to current levels. 

Options traders are coming out in droves today, and bears are in charge. So far, 8,153 calls and 8,941 puts have crossed the tape, which is three times the intraday average. The most popular is the January 2022 240-strike put, followed by weekly 8/6 255-strike call, with positons being opened at both.

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