Eli Lilly (LLY) shares have been a major beneficiary as overspending and valuation concerns have made investors rotate out of artificial intelligence (AI) stocks in the trailing six months. But that benefit is likely to hit a pause as LLY posts its fiscal Q3 earnings on Oct. 29, according to the latest options data from Barchart.
Heading into the quarterly print, Eli Lilly stock is up more than 50% versus its year-to-date low in late April.
Options Data Points to a Post-Earnings Dip in LLY Stock
Consensus is for Eli Lilly to report $5.38 in earnings per share (EPS) for its third financial quarter, which would represent a more than 23% decline on a year-over-year basis.
Options traders seem to believe that would trigger a near-term selloff in LLY shares, as evidenced by the put-to-call ratio of about 2.18x on contracts expiring Nov. 6. Barchart’s data also pegs the lower price on those options contracts at $1,241 as of this writing, signaling potential for a more than 3% post-earnings dip.
A small 0.54% dividend yield on the pharmaceutical behemoth nonetheless offers a reason to look beyond the near-term earnings noise.
Bernstein Raises Price Target on Eli Lilly Shares
Bernstein analysts also disagree with the options market sentiment ahead of LLY’s quarterly print.
In a research note yesterday, the investment firm maintained an “Outperform” rating on the NYSE-listed giant and raised its price objective to $1,450, which signals potential upside of another 13% from here.
Bernstein’s bullish thesis is rooted in better-than-expected demand for Mounjaro; analysts expect international sales of that flagship drug to grow 8% sequentially, significantly more than the 1% consensus.
Plus, Zepbound and Foundayo sales will result in upward revisions of 2027 earnings and revenue estimates, helping Eli Lilly shares rip much higher over the next 12 months, they told clients.
What’s the Consensus Rating on Eli Lilly?
While not as bullish as Bernstein, other Wall Street firms are also convinced that LLY stock has more room to the upside.
The consensus rating on Eli Lilly remains at “Strong Buy,” with the mean price target of about $1,363 indicating potential for an 8% rally from current levels.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.