Wall Street liked what it saw from GE Healthcare and Eli Lilly of their earnings reports, resulting in a round of well-deserved price goal bumps for the Club stocks. Analysts at 4 equity research firms boosted their price targets for GE Healthcare for the reason that maker of MRI machines and other medical equipment on Tuesday delivered better-than-expected fourth-quarter results and upbeat 2024 guidance. Meanwhile, a minimum of eight analysts lifted their Eli Lilly price targets after the pharmaceutical giant provided an encouraging update Tuesday on its most-important drug, tirzepatide, which is currently marketed as Mounjaro for type-2 diabetes and Zepbound for obesity. Sales data not only looked strong for those two approved treatments, but the corporate said tirzepatide showed promise in treating fatty liver disease in a midstage trial. In our earnings analyses, we raised our Club price targets on GE Healthcare to $92 per share from $91 and Eli Lilly to $750 from $630. But, admittedly, the fatty liver disease update — combined with some emerging questions across the obesity pipeline at Amgen , considered one of the various drug corporations attempting to grab a bit of the booming weight-loss market — has us pondering we were too conservative on Lilly. GE Healthcare fell barely Wednesday, holding on to most of Tuesday’s almost 11.7% surge. Eli Lilly, which dropped fractionally Tuesday, climbed nearly 3% on Wednesday to $725.38, one other record closing high. The analyst community’s optimistic response to GE Healthcare’s quarter and guidance is notable considering it has been a battleground stock for many of its nine-month tenure in our portfolio . It spent late July and most of August and September tumbling in a somewhat confusing fashion — and we took advantage of the slide to purchase shares below $70 apiece on multiple occasions. GEHC 1Y mountain GE Healthcare’s stock performance over the past 12 months. The largest price goal boost for GE Healthcare got here from Piper Sandler, going to $94 per share from $84 while reiterating its buy-equivalent rating. The firm’s medical-technology analysts also moved GE Healthcare up their list of preferred stocks for 2024, citing its belief that the corporate can deliver, a minimum of, the upper end of its earnings-per-share outlook between $4.20 to $4.35 and a reduced valuation compared with peers. Mizuho Securities — considered one of the early GE Healthcare bulls after the corporate split from former parent General Electric in January 2023 — raised its price goal on the stock to $96 from $94. Mizuho said it believes the chance of a significant negative surprise tied to the corporate’s operations in China, amid an anti-corruption campaign targeting the country’s healthcare industry, is “step by step diminishing.” We trimmed our GE Healthcare position last week , simply to be protected in case China proved to be a black eye in Tuesday’s earnings report, but ultimately the situation has remained higher than feared. And GEHC’s guidance does assume softness in China in the primary half of the yr, before returning to growth over the ultimate six months. Evercore ISI and Wells Fargo were behind the opposite two GE Healthcare price-target bumps; each firms maintained buy rankings on the stock. Evercore went to $93 a share from $86, arguing the stock deserves a “rerating” after delivering double-digit earnings per share growth. Meanwhile, Wells Fargo raised its goal to $90 a share from $85. The positive research and price-target hikes following Eli Lilly’s quarter and guidance will not be necessarily a surprise, even when the market response Tuesday was muted against the backdrop of sky-high expectations. The explanation is Eli Lilly has had major champions within the analyst community for quite a while — and, in fact, we’ve liked and owned the stock for years, too. LLY 1Y mountain Eli Lilly’s stock performance over the past 12 months. BMO Capital Markets and Truist Securities raised their price targets on Eli Lilly to $865 from $710 and $850 from $650, respectively. Those look like the very best on Wall Street, in line with FactSet data available to CNBC. Each firms have buy rankings on Lilly’s stock. Truist’s more bullish outlook reflects “increased conviction” in Eli Lilly’s drug pipeline and demand for Mounjaro and Zepbound, analysts wrote to clients Tuesday. Truist now expects sales of the drugs to hit $65 billion at their peak, up from $45 billion. Cantor Fitzgerald ($815 from $630), Bank of America ($800 from $750), Barclays ($810 from $680), Wells Fargo ($825 from $700), and Morgan Stanley ($805 from $763) were the opposite research firms with buy rankings on Eli Lilly to boost their price targets. The continued rollout of Mounjaro and Zepbound is more likely to “drive upward revisions to revenue estimates and drive margin expansion, albeit at a more measured pace in 2024, and the corporate has the strongest growth profile inside our coverage universe,” Morgan Stanley wrote in a note to clients Wednesday. Goldman Sachs, which has a hold rating on Eli Lilly, bumped its price goal to $650 a share from $600. (Jim Cramer’s Charitable Trust is long GEHC and LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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An examination with a CT scanner is ready within the emergency room of the university hospital (UKJ) in Jena, Germany. The GE Healthcare scanner is named the Revolution CT.
Martin Schutt | picture alliance | Getty Images
Wall Street liked what it saw from GE Healthcare and Eli Lilly of their earnings reports, resulting in a round of well-deserved price goal bumps for the Club stocks.
