Ticker Reports for November 28th
Eli Lilly, Pfizer, and AstraZeneca: 2025 Vaccine Makers to Watch
It is still too early to determine any definitive federal policies for 2025 (or beyond) that could affect these companies. However, some analysts have speculated that the administration might restrict access to vaccines or even ban them outright, which would create a complex landscape for these firms.
Given this evolving environment, now is the time for investors to consider the strengths and opportunities presented by Eli Lilly, Pfizer, and AstraZeneca. Here's why these companies remain compelling investment options:
Eli Lilly: Impressive Roster of Products, Pullback Due to Lowered Guidance
Of the three major vaccine firms listed above, Eli Lilly has performed the strongest over the last year. Shares of LLY have risen by nearly a quarter during that time and by a shocking 543% in the last five years. Eli Lilly's rapid growth has been linked to its deep and varied roster of leading pharmaceutical products, including Trulicity and Mounjaro (treatments for diabetes) and Prozac and Cymbalta (treatments for clinical depression), among many others.
In particular, Eli Lilly's Mounjaro and Zepbound—both with the active ingredient tirzepatide to treat diabetes and foster weight loss—are strong sellers despite up-and-coming competition from companies like Hims & Hers Health Inc. (NYSE: HIMS). For the latest quarter, volume growth for these two products helped to drive a 20% year-over-year improvement to revenues. Eli Lilly's upcoming product pipeline is also impressive. It has recently received FDA approval for Ebglyss, a treatment for moderate-to-severe atopic dermatitis, and approval in Japan for Kisunla, a treatment for early symptomatic Alzheimer's disease.
Despite the overall gains in the last year, LLY shares have dropped by about 16% in the last month after the company lowered its full-year EPS guidance and the top end of its revenue guidance for the same period.
However, the lowered guidance is a result of inventory management and in-process research and development costs rather than fundamental changes in the company's business.
This means that it may be an opportunity to buy LLY shares at a relative bargain.
Pfizer: Sell-Off May Present an Opportunity
Pfizer produces of one of the most popular COVID-19 vaccines in the United States, and so it is perhaps no surprise that shares have pulled back 10.4% in the last month, particularly following the election. But the firm's stock performance has been highly volatile for the entirety of the last year, and it is currently down about 16% in that timeframe.
One upside is that the sell-off of Pfizer shares has made the stock a better value proposition. As of November 25, Pfizer's forward P/E ratio is just 8.8, considerably lower than Eli Lilly at 56.5 and AstraZeneca at 16.2. Pfizer also has a competitive price-to-book ratio of 1.54.
Analysts also continue to see long-term potential for the company following what may be an intermediate period of instability, rating the stock a Moderate Buy and assigning a consensus price target of $32.92, more than 28% above current levels.
AstraZeneca: Surging Demand for Oncology Products Fuels Growth
AstraZeneca beat analyst EPS predictions for its latest quarter thanks to surging demand for some of its oncology products, including Imfinzi and Calquence. These treatments are pivotal in addressing critical needs in cancer care, cementing AstraZeneca's position as a leader in the market.
Building on this momentum, the company raised its full-year guidance for total revenue and core EPS growth, reflecting confidence in its ongoing performance and future prospects. AstraZeneca's strong product lineup is matched by its pipeline, as analysts expect the company to release as many as two dozen new products by the end of the decade.
AstraZeneca is currently rated a Moderate Buy with a consensus price target of $89.75, offering an upside potential of nearly 37% from current levels.
Biotech Leaders Beyond Vaccines
As the vaccine policy landscape evolves under the incoming Trump administration, Eli Lilly, Pfizer, and AstraZeneca are well-equipped to navigate uncertainties and capitalize on their strengths. If you are considering an investment in biotech you might take comfort in stocks that are not too reliant on vaccines for continued revenue growth—and all three of these companies have fast-growing segments completely unrelated to vaccines.
Bill Gates' is about to mint millionaires (again) with Stargate.
This little-known project that Bill Gates has been quietly working on that's about to unleash an AI breakthrough so advanced, it's going to make ChatGPT look like VHS.
But what's even more unbelievable?
I believe it'll make Nvidia's meteoric rise look like a backyard bottle rocket.
DICK'S Sporting Goods: The Under-the-Radar Buy-and-Hold Winner
DICK'S Sporting Goods (NYSE: DKS) emerged as a buy-and-hold quality stock before 2020, but its results since confirm the fact. This company is firing on all cylinders after establishing itself as the leader in its category and can compete against big-box stores like Walmart (NYSE: WMT), Target (NYSE: TGT), and Costco (NASDAQ: COST). Its selection of high-quality, brand-name sporting goods spans the recreational universe and is the source for athletes. The brand quality is compounded by an operational quality that sustains financial health despite business investment and capital returns. The net result is a best-in-breed retail stock with a positive growth trajectory, healthy cash flow, and robust return for buy-and-hold investors.
DICK'S Sporting Goods Rises After Beat-and-Raise Quarter
DICK'S Sporting Goods had another solid quarter despite the macroeconomic headwinds and the negative impact of a calendar shift. The company reported $3.06 billion in revenue, which was flat compared to the prior year but 100 basis points (bps) better than expected. The strength was driven by an acceleration in comp store growth to 4.2%, more than double the prior year, offset by five fewer stores. The company says it had a strong back-to-school season and that new concepts resonate with consumers. Digital remains a critical element.
The margin news is also good. The adjusted results showed some contraction, but GAAP expanded to produce growth. Still, the $2.75 adjusted EPS is 220 bps ahead of MarketBeat’s reported consensus and underpins a robust financial condition. The critical takeaway is that the company sustains solid margins in a challenging environment and produces ample cash flow.
DICK'S is cash-flow positive and able to invest in growth while maintaining the balance sheet health and returning capital to investors. The dividend is worth $4.40 to investors in 2024, about 2%, with shares near record highs, and the buybacks reduced the count by 4.5% YTD at the end of Q3.
The guidance aligns with the outlook for capital returns. DICK'S raised its full-year targets because of the Q3 strength and points to a healthy Q4 holiday season. The company may outpace its guidance because of the trends, as it has all year, and persist with strength next year. The combined impact of easing monetary headwinds and a consumer-friendly president is expected to sustain consumer spending trends, if not accelerate them. The analysts' forecasts for 2025 are likely low in this scenario, so the revision upgrade cycle will likely continue.
The Analysts' Trends Lead DICK'S Sporting Goods Stock to Higher Prices
The analysts' trends in 2024 are bullish and unlikely to change, given the Q3 results and guidance. The trends include numerous upgrades and price target increases, with the sentiment trending higher to Moderate Buy from Hold and the price target up by 70% in 12 months. The consensus price target assumes fair value near record highs, but the revision trends put the stock in the high-end range near $280, a 20% gain from the critical resistance point and well above the current all-time high.
The critical resistance point is near $235 and may be reached soon. If not, this stock could remain range-bound at current levels until there is evidence of strength in 2025. That could come as early as the Q4 earnings release, due in February. The worst-case scenario is that this stock moves to the low end of its trading range before continuing the uptrend, a movement that would present a better entry point. Regardless, trading at 15x and expected to grow another mid-single-digit amount in 2025, it is a cheap stock to own and pays a healthy, reliable capital return worthy of inclusion in a dividend-growth portfolio.
Bill Gates' is about to mint millionaires (again) with Stargate.
This little-known project that Bill Gates has been quietly working on that's about to unleash an AI breakthrough so advanced, it's going to make ChatGPT look like VHS.
But what's even more unbelievable?
I believe it'll make Nvidia's meteoric rise look like a backyard bottle rocket.
Semler Stock Surges Over 130% in November: A New Bitcoin Play?
With Bitcoin hovering near the psychological $100,000 level, SMLR has become a speculative favorite, joining the ranks of crypto-related stocks like MicroStrategy (NASDAQ: MSTR) and MARA Holdings (NASDAQ: MARA). But does SMLR represent a legitimate Bitcoin play, or is this momentum short-lived?
What Is Semler Scientific?
Although the company has drawn attention for its Bitcoin purchases, Semler's roots lie in healthcare, not cryptocurrency. Semler specializes in providing technology solutions to improve the clinical efficiency of healthcare providers in the United States.
Its flagship product, QuantaFlo, is a four-minute, in-office blood flow test used to evaluate patients’ vascular health. This diagnostic tool is a staple for healthcare providers aiming to improve early detection of vascular conditions. Additionally, Semler offers Insulin Insights, a software platform that helps optimize outpatient insulin dosing. Despite its recent pivot toward Bitcoin, Semler's core business remains firmly tied to the healthcare sector.
Semler's Big Bitcoin Bet
In November, Semler made headlines by significantly increasing its Bitcoin holdings as part of its treasury strategy. The company purchased 215 Bitcoin for $17.7 million, bringing its total holdings to 1,273 Bitcoin acquired at an average price of almost $69,700. The recent purchase was partially funded by an at-the-market stock offering that raised $21.5 million by selling 505,544 shares.
This bold move positions Semler as a company actively leveraging equity to expand its Bitcoin portfolio. While it’s not a pure-play cryptocurrency stock like MicroStrategy, its growing Bitcoin holdings have captured investor attention, making it a unique hybrid between healthcare and digital assets.
Bitcoin’s Impact on Semler's Earnings
Semler's Bitcoin holdings played a significant role in its Q3 earnings, helping the company surpass expectations despite challenges in its core business. The company reported diluted EPS of 72 cents, significantly beating the 48-cent forecast. This outperformance was primarily due to $1.1 million in unrealized gains from Bitcoin and cost-cutting measures.
However, underlying operational results paint a less optimistic picture. Revenue declined to $13.5 million in Q3, down from $16.3 million in the same period last year. QuantaFlo, the company’s primary product, saw declining revenues, reflecting struggles in market expansion and customer retention.
The company’s pivot to Bitcoin may be a response to these headwinds. By adopting a Bitcoin-focused strategy, Semler aims to diversify its earnings and attract investor interest, but it’s unclear if this approach can offset the challenges in its core business.
A Balancing Act: Potential Rewards and Risks
Semler's embrace of Bitcoin presents both opportunities and risks. On one hand, the company’s Bitcoin holdings have significantly boosted investor sentiment and created a speculative buzz. With Bitcoin trading near all-time highs, further gains in cryptocurrency prices could drive additional upside for Semler.
On the other hand, Bitcoin’s volatility poses a substantial risk. A significant downturn in cryptocurrency markets could negatively impact the company's earnings, particularly given the unrealized gains that have bolstered its recent results. Additionally, Semler's core business faces persistent challenges, with declining revenues and limited expansion in its customer base.
The stock's coverage is also limited, with only one analyst providing ratings. This lack of broader institutional attention could limit its appeal to more risk-averse investors.
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