Eli Lilly, Merck, and Caterpillar Top Estimates; D.R. Horton Issues Weak 2027 Outlook

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This update was written automatically with AI from market data and news wire reports, and published without review by a person.

Key Takeaways

  • Eli Lilly (LLY) shares surged after reporting $24.40B in revenue, crushing estimates of $22.52B, driven by massive $10.7B sales of its blockbuster drug Mounjaro.
  • Merck (MRK) outperformed expectations with $18.09B in sales and an adjusted EPS of $2.49, bolstered by strong demand for Keytruda and Gardasil.
  • D.R. Horton (DHI) issued a disappointing 2027 outlook, forecasting revenue between $30.0B and $32.0B, well below the $33.26B consensus estimate.
  • Caterpillar (CAT) maintained steady growth with an adjusted EPS of $7.20, slightly beating the $7.10 estimate despite global macroeconomic pressures.
  • BofA Global Research updated its hawkish stance, now expecting the Federal Reserve to hike interest rates by 25 basis points in both December 2026 and March 2027.

Pharma Giants Lead Market Gains

Eli Lilly (LLY) delivered a standout performance for Q3 2026, significantly raising its full-year revenue guidance to a range of $91.0B to $92.0B. The company's weight-loss and diabetes portfolio continues to dominate, with Mounjaro generating $10.7B and Zepbound contributing $5.35B, both exceeding analyst projections.

Merck (MRK) also reported robust quarterly results, with total sales of $18.09B beating the $17.31B estimate. The company’s oncology flagship, Keytruda, saw revenues of $8.60B, while its Gardasil vaccine franchise brought in $2.00B, showcasing the resilience of its core pharmaceutical business.

Housing and Industrial Sector Updates

D.R. Horton (DHI) provided a cautious outlook for the coming fiscal year, signaling potential headwinds in the housing market. The company expects to close between 79,000 and 84,000 homes in 2027, missing the market's expectation of 86,357, as affordability and inventory levels remain under scrutiny.

Caterpillar (CAT) managed to beat earnings expectations with an adjusted EPS of $7.20. The industrial giant reported total revenue of $20.68B, with its Machinery, Power & Energy segment accounting for the lion's share at $19.65B, meeting analyst targets for the quarter.

Consumer Brands and Economic Outlook

Restaurant Brands (QSR) reported a mixed Q3, where an adjusted EPS of $1.10 beat estimates, but system-wide sales of $12.97B fell slightly short. While Burger King saw a strong comparable sales increase of 8.3%, Popeyes struggled with a 1.8% decline in comparable sales.

Hershey (HSY) surprised the market by raising its full-year adjusted EPS guidance to $8.58 – $8.74. The chocolatier reported Q3 net sales of $3.28B, beating the $3.25B estimate, and increased its capital expenditure forecast to $450M to support future growth.

Finally, BofA Global Research issued a new forecast for the Federal Reserve, predicting a more aggressive rate path. Analysts now expect 25 basis point hikes in late 2026 and early 2027, suggesting that inflationary pressures or economic resilience may keep the central bank in a tightening cycle longer than previously anticipated.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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