By Senad Karaahmetovic
Shares of Eli Lilly (NYSE:LLY) are down in pre-open Tuesday after the Indiana-based pharmaceutical giant offered a weaker-than-expected EPS forecast.
Lilly offered 2023 guidance today, which came in below the average analyst consensus. The company sees the adjusted 2023 EPS between $8.10 and $8.30, much lower than the estimate of $9.13. The lower-than-expected EPS guidance is a result of the higher R&D expenses, which are seen in the range of $8.2-8.4 billion, much higher than the consensus of $7.54B.
Revenue is seen between $30.3B and $30.8B, higher than the $30.17B consensus.
“This growth is expected to be partially offset by lower revenue for Alimta due to its loss of patent exclusivity, no anticipated Covid-19 antibody revenue, and the continued negative impact of foreign exchange rates,” Lilly said in a press release.
The company also reaffirmed its 2022 guidance while adding that it expects to launch up to four new medicines.
Shares initially fell 4% before paring gains on the softer-than-expected CPI print.
BMO analysts said the 2023 guidance came in ahead of expectations for revenue, but increasing R&D expenses are dragging on the EPS guidance.
“We are encouraged with the company's above consensus forecast. We expect numbers to come up for next year,” they said in a client note.
Goldman Sachs analysts added:
“We expect moderate weakness in the stock on the EPS guidance miss vs. GS/Cons and on the implied lower margins for next year, though note investor focus is primarily on the topline growth outlook given the significant opportunity for Mounjaro/tirzepatide in diabetes/obesity.”