Following our price target changes on eight Club holdings last month, we’re updating three more Tuesday to reflect their recent quarterly earnings reports and outlooks. Eli Lilly (LLY): Club price target increasing to $380 per share from $350 While its third-quarter wasn’t the cleanest , with management lowering its full-year revenue outlook by approximately $300 million due to increased foreign exchange headwinds, we were impressed by how Lilly’s brand new type-2 diabetes drug Mounjaro outperformed even elevated expectations. With sales growth expected to surge higher if Mounjaro were to get federal regulatory approval next year to also treat obesity, we remain very bullish that the drug could become one of the best-selling of all time. Management has been investing aggressively to increase manufacturing capacity in anticipation. It’s also worth noting that we have not adjusted our Lilly price target since competitor Biogen (BIIB) reported positive topline results from a study to treat early Alzheimer’s. Lilly is also working on a separate Alzheimer’s drug, which has shown some encouraging results. Good news for Biogen is good news for Lilly’s donanemab as both are antibodies that aim to reduce the buildup of the amyloid beta protein in the brain, which is seen with the degenerative disease. Shares of Eli Lilly trade at a significant premium to its peer group and the broader market, but we think health care is group investors are willing to pay up for thanks to its recession-resistant characteristics and limited impact from inflation. LLY has gained more than 32% in 2022, compared to the nearly 19% year-to-date decline in the S & P 500 . Halliburton (HAL): Club price target increasing to $44 per share from $40 This update comes about two weeks after the oilfield services provider reported a stronger-than-expected third quarter . It also provided bullish commentary around margin expansion, backed by pricing power and a lower cost structure. Halliburton has also made significant strides in cleaning up its balance sheet, putting it in a position to potentially increase cash returns to shareholders next year. Future increases to the dividend and buyback program should further improve sentiment around the stock, which has shattered the performance of the broader market with an over 72% increase in 2022. Starbucks (SBUX): Club price target increasing $100 per share from $95 The coffee retailer reported great fiscal fourth quarter earnings last week thanks to strength in North America, where same store sales grew faster than expected with better than expected margins. We think the momentum in North America will continue as management rolls out its reinvention plan, which consists of a series of what the company calls “strategic and highly targeted investments” designed to improve the operating efficiencies of its stores. Although sales in China remain depressed due to ongoing Covid-related restrictions, we still view the Chinese market as an…
Read More: We’re increasing price targets on 3 of our stocks, including 2