Post-Earnings Dip: Why This Beaten-Down Stock Is a No-Brainer Buy
There is plenty of movement in equity markets during earnings season, but from a fundamental standpoint, investment theses seldom change. That's why significant price drops in shares of quality businesses can be excellent buying opportunities.That brings us to Eli Lilly (NYSE: LLY), a leading pharmaceutical company that released its quarterly update on May 1. The market was not impressed, leading to a decline of nearly 12% in the drugmaker's share price post-earnings. Yet, this shouldn't deter long-term investors. Here's why the stock still looks attractive.Eli Lilly continues to deliver results that would make any megacap pharmaceutical company incredibly proud. Revenue in the first quarter grew by 45% year over year to $12.7 billion. Divide that top-line growth by three, and the drugmaker would still be performing better on this front than most of its similarly sized peers. Its diabetes and obesity management medications did most of the heavy lifting, but older products, like cancer drug Verzenio, continue to perform well. Adjusted earnings per share (EPS) were up 29% year over year to $3.34.Continue reading
There is plenty of movement in equity markets during earnings season, but from a fundamental standpoint, investment theses seldom change. That's why significant price drops in shares of quality businesses can be excellent buying opportunities.
That brings us to Eli Lilly (NYSE: LLY), a leading pharmaceutical company that released its quarterly update on May 1. The market was not impressed, leading to a decline of nearly 12% in the drugmaker's share price post-earnings. Yet, this shouldn't deter long-term investors. Here's why the stock still looks attractive.
Eli Lilly continues to deliver results that would make any megacap pharmaceutical company incredibly proud. Revenue in the first quarter grew by 45% year over year to $12.7 billion. Divide that top-line growth by three, and the drugmaker would still be performing better on this front than most of its similarly sized peers. Its diabetes and obesity management medications did most of the heavy lifting, but older products, like cancer drug Verzenio, continue to perform well. Adjusted earnings per share (EPS) were up 29% year over year to $3.34.
