ETFOptimize | High-performance ETF-based Investment Strategies

Quantitative strategies, Wall Street-caliber research, and insightful market analysis since 1998.


ETFOptimize | HOME
Close Window

Eli Lilly, McKesson, Novartis Flash Promising Chart Action

healthcare stocks outlook

Although healthcare stocks lag other sectors, large-cap leaders such as  Eli Lilly & Co. (NYSE: LLY), McKesson Corp. (NYSE: MCK) and Novartis AG (NYSE: NVS)  are in possible buy ranges as they get moving-average support.

Moving average support is a crucial technical indicator in stock analysis, valued by retail and institutional investors. This easy-to-use indicator offers insights into a stock's trend direction and potential reversals, making it a valuable tool for decision-making.

Institutional investors, with their significant capital and influence, pay close attention to moving averages.

For example, you’ll frequently see a stock decline, but find support just at the level of the 50-day or 200-day line. Big institutional investors, such as mutual funds, hedge funds, banks or insurance companies, will often step in to buy shares at a more attractive valuation, if they have conviction about a stock. 

Lilly: Weight-Loss Drug Driving Revenue

Eli Lilly revenue was up 28% in the most recent quarter, mostly due to sales of its Mounjaro weight-loss drug that generated $980 million in sales. That was up from just $16 million in the year-ago quarter, showing the rapid ramp-up of the drug’s popularity. 

Wall Street is optimistic about Lilly’s prospects; if you look at MarketBeat’s Eli Lilly & Co. analyst ratings, you’ll see a consensus of “moderate buy.” Since the company’s most recent earnings report on August 8, when the stock gapped up nearly 15%, 12 analysts boosted their price targets or upgraded their ratings on the stock.

The Eli Lilly chart shows the stock consolidating near its 50-day line. On October 6, the stock rallied 3.87%, bouncing off the 50-day average on news that 

On Friday, Bank of America analysts boosted their price target on Eli Lilly to $700 from $600, saying they see a favorable risk/reward profile, looking to the end of the year. Bank of America analysts said they expect regulatory approvals for obesity, Alzheimer's and ulcerative colitis treatments. 

McKesson Earnings and Revenue Accelerating

McKesson isn’t a well-known name to the general public, but the stock is up 19.30% so far this year, and 9.50% in the past month.

With a market capitalization of $60.34 billion, McKesson is the largest domestic pharmaceutical distributor, ahead of rivals Cencora, formerly AmeriSource Bergen, and Cardinal Health Inc. (NYSE: CAH), based on revenue.

McKesson’s sales and earnings both accelerated in the past two quarters, and Wall Street is eyeing earning growth of 5% this year and 13% next year. The company said first-quarter revenue of $74 million was primarily driven by growth in the U.S. Pharmaceutical business segment.

The McKesson chart shows a stock that’s trading 1.4% above its previous buy point of $441. The stock is holding just 1.1% higher than its 10-day moving average. McKesson stock is currently actionable, and will be until it rises 5% above that previous high of $441.  

While the stock consolidated recently along its 10-week average, trading volume was low, which is exactly what you want to see. That means there was no mad dash for the exits.

MarketBeat’s McKesson analyst ratings show a consensus view of “moderate buy.”  

Novartis Completes Sandoz Spinoff

Analysts expect Switzerland-based Novartis to see an earnings decline this year, with growth returning again in 2024, when Wall Street forecasts growth of 17%. 

The company focuses on five core therapeutic areas: cardiovascular, immunology, neuroscience, solid tumors and hematology, with multiple significant in-market and pipeline assets in each of those areas.

On October 4, Novartis completed the spinoff of Sandoz Group AG (OTCMKTS: SDZNY), which develops and manufactures generic pharmaceuticals and biosimilars that are sold globally. 

After that spinoff, Novartis’ market capitalization is $200.96 billion. 

The Novartis chart shows the stock consolidating below a July 21 high of $99.93, which is the current buy point.  

If you look closely at a daily chart for Novartis, you’ll see that shares closed on October 6 just slightly above the 50-day moving average. You’ll also see numerous intraday gaps. With an overseas stock that trades on a U.S. exchange as an American Depositary Receipt, those gaps reflect currency exchange gaps, as well as price differences that occur as global markets are open at different times.  

Stock Quote API & Stock News API supplied by www.cloudquote.io
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms Of Service.


 

IntelligentValue Home
Close Window

DISCLAIMER

All content herein is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor should it be interpreted as a recommendation to buy, hold or sell (short or otherwise) any security.  All opinions, analyses, and information included herein are based on sources believed to be reliable, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. We undertake no obligation to update such opinions, analysis or information. You should independently verify all information contained on this website. Some information is based on analysis of past performance or hypothetical performance results, which have inherent limitations. We make no representation that any particular equity or strategy will or is likely to achieve profits or losses similar to those shown. Shareholders, employees, writers, contractors, and affiliates associated with ETFOptimize.com may have ownership positions in the securities that are mentioned. If you are not sure if ETFs, algorithmic investing, or a particular investment is right for you, you are urged to consult with a Registered Investment Advisor (RIA). Neither this website nor anyone associated with producing its content are Registered Investment Advisors, and no attempt is made herein to substitute for personalized, professional investment advice. Neither ETFOptimize.com, Global Alpha Investments, Inc., nor its employees, service providers, associates, or affiliates are responsible for any investment losses you may incur as a result of using the information provided herein. Remember that past investment returns may not be indicative of future returns.

Copyright © 1998-2017 ETFOptimize.com, a publication of Optimized Investments, Inc. All rights reserved.