Jim Cramer is Talking About These 7 Stocks

5. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 100

On Wednesday, talking about his favorite, Eli Lilly and Company (NYSE:LLY), Cramer expressed disappointment with the company’s recent earnings report. Here’s what Mad Money’s host had to say:

“Then there’s Cramer fave, Eli Lilly. Here’s the stock that’s been almost as hot as Nvidia. It’s up 45% for the year, even after today’s hideous 6.2% collapse. Given how much Lilly had run into the quarter, we needed to see some extraordinary numbers from the revolutionary GLP-1 drugs for diabetes and weight loss, right?… And we also needed them to raise their forecast dramatically, but we got nothing like that. Instead, Lily reported a clear miss, a real whiff. And the explanation for it was totally opaque. I’m still trying to figure out what the heck happened. Was it too much supply? Too little demand? Stock finished about $56. One point, it was down a hundred. Talk about an unhappy forecast.”

Eli Lilly (NYSE:LLY) is a prominent global pharmaceutical company dedicated to transforming diabetes care and addressing obesity and its serious long-term effects. A shining star in its product line is Zepbound, a new treatment for obesity that activates specific hormone receptors, offering a fresh approach in this therapeutic area. Another significant product is Mounjaro, the first approved medication for type 2 diabetes targeting these same receptors, utilizing tirzepatide as its active ingredient. These medications, also known as GLP-1 agonists, function by activating receptors for hormones released after eating, helping individuals feel fuller.

In the third quarter, the company reported sales of $11.44 billion. The company noted that U.S. sales for both Mounjaro and Zepbound were adversely affected by a decrease in inventories within the wholesaler channel.

During the Q3 earnings call, CFO Lucas Montarce explained that wholesalers had reduced their inventories of diabetes and obesity drugs during the quarter, describing it as a temporary issue. He emphasized that demand for Mounjaro and Zepbound remains strong and continues to grow. CEO David Ricks also highlighted a 25% increase in U.S. prescription volume for these medications from the second to the third quarter.

For 2024, Eli Lilly (NYSE:LLY) anticipates a non-GAAP EPS between $13.02 and $13.52, having previously forecast a full-year non-GAAP EPS of $16.10 to $16.60. This adjustment is primarily related to the acquisition of Morphic Holdings, which impacted in-process research and development charges by $3.09 billion, or $3.33 per share. For the third quarter, these charges amounted to $2.83 billion, or $3.08 per share, mainly associated with the Morphic Holdings acquisition.