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- 🗞️ Eli Lilly Tanks 5.6%
🗞️ Eli Lilly Tanks 5.6%
Earnings preview: META, MSFT, and HOOD
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Eli Lilly vs. Novo Nordisk
The obesity drug market just got a major reality check. Novo Nordisk's (NVO) shocking profit warning and guidance cuts sent shockwaves through the sector, with the Danish pharmaceutical giant's shares plummeting over 21% on Tuesday.
The company slashed its 2025 sales growth forecast to 8%-14% from a previous 13%-21%, citing weaker-than-expected Wegovy performance in the U.S. and slower international penetration.
This isn't just bad news for Novo – it's raising uncomfortable questions about the entire obesity drug boom.
When a market leader with a nearly three-year head start gets outpaced by a newcomer, something fundamental is shifting.
Eli Lilly's (LLY) Zepbound prescriptions have surpassed Wegovy by over 100,000 weekly, proving that first-mover advantage means nothing if you can't execute.
Our Takeaway
This profit warning exposes cracks in what many believed was an unstoppable growth story.
While Lilly appears to be winning market share, the sector's overall trajectory is now questionable.
Investors should prepare for increased volatility as competitive dynamics intensify and cheap compounded alternatives potentially eat into both players' margins.
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Market Overview
The S&P 500 closed lower on Tuesday as progress on trade talks with Beijing stalled and traders braced for the Federal Reserve's rate decision.
Selling pressure intensified in the final hour of trading, at one point bringing the S&P 500 to its session low.
Investors trimmed some bets on risk assets after stocks came roaring back in recent months from their April lows, helped by progress in trade talks between the U.S., Japan, and the European Union.
Talks with China have been less certain, with U.S. negotiators ending negotiations with their Beijing counterparts on Tuesday, while a potential extension of a pause on higher China tariffs remained up in the air.
The dollar strengthened as futures showed near-flat movement ahead of Wednesday's Fed decision, with a 98% probability of rates holding steady at 4.25%-4.5%.
Stock Moves Deciphered
UPS (UPS) - Shares plunged 10.6% after the shipping giant failed to provide full-year guidance, citing macroeconomic uncertainty. UPS posted adjusted earnings of $1.55 per share, slightly missing the $1.56 estimate, while revenue declined year-over-year despite beating expectations.
Bitmine Immersion Technologies (BMNR) - The bitcoin miner tumbled 9% despite announcing a $1 billion stock buyback program. Investor concerns about potential dilution from an increased $4.5 billion share offering capacity overshadowed the buyback news.
CyberArk Software (CYBR) - The cybersecurity stock surged 13.5% on reports that Palo Alto Networks is in talks to acquire the company for over $20 billion. The potential deal could finalize as early as this week, valuing CyberArk at a significant premium.
Headlines You Can't Miss
South Korea's LG Energy Solution signs $4.3 billion battery supply deal with undisclosed party.
Powerful quake in Russia's Far East causes tsunami, Japan and Hawaii order evacuations.
MAS keeps monetary policy steady, flags slowdown in the second half.
Starbucks shares climb as CEO Niccol instills confidence that revival is underway.
Australia's second-quarter inflation drops to lowest since March 2021, supporting case for rate cut.
U.S.-China trade talks end without extension of tariff truce, as Trump weighs options.
Trending Stocks
Boeing (BA): The aerospace giant delivered mixed results with shares falling 4.4% despite posting the most airplane deliveries since 2018.
Boeing reported a smaller-than-expected quarterly loss and delivered 436 aircraft in Q2, up from 327 in the prior quarter.
However, investors remained cautious about ongoing regulatory challenges and production bottlenecks.
CEO Quote🎤: “We want to be stable at 38 a month and then work with the FAA on a rate increase. We will be working with the FAA in the third quarter for sure.”
PayPal (PYPL): Despite beating second-quarter expectations on both earnings and revenue, PayPal shares declined 8.7% as investors focused on competitive pressures in digital payments.
The company raised its full-year outlook for earnings and transaction margin dollars, with Venmo achieving its highest growth rate in three years at 12% payment volume growth.
CEO Quote🎤: “We delivered another quarter of profitable growth, driven by continued strength across many of our strategic initiatives ranging from PayPal and Venmo branded experiences to acting as payment service provider and other services.”
Starbucks (SBUX): Starbucks reported that same-store sales fell for a sixth straight quarter as CEO Brian Niccol tries to implement a turnaround strategy.
The company beat Wall Street’s quarterly revenue estimates, and comparable sales in China rose.
CEO Quote🎤: “While our financial results don’t yet reflect all the progress we’ve made, the signs are clear — we’re gaining momentum.”
What’s Next?
Key Earnings Today 👇
Microsoft (MSFT): Fiscal Q4 revenue forecast at $73.83 billion vs. $64.73 billion last year. Adjusted earnings are expected to grow from $2.95 per share to $3.38 per share.
Meta Platforms (META): Q2 revenue forecast at $44.84 billion vs. $39.07 billion last year. Adjusted earnings are expected to grow from $5.16 per share to $5.90 per share.
Robinhood (HOOD): Q2 revenue forecast at $913 million vs. $682 million last year. Adjusted earnings are expected to grow from $0.3 per share to $0.35 per share.
Other Key News
Federal Reserve interest rate decision Wednesday afternoon (98% chance of hold)
GDP reading, private payroll data, and pending home sales are due Wednesday morning
Key July jobs report caps off data-heavy week on Friday
Track upcoming news and earnings on your portfolio companies with Ziggma.
Chart of the Day
Source: Carbon Finance
Meme of the Day
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