Position for Lilly's Q1 Announcement: Tactical ETF Strategies for Earnings Volatility

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Eli Lilly and Company's (LLY) Q1 2025 earnings report (May 1st before market open) comes during a period of remarkable expansion in the company's GLP-1 business. Investors will focus on Mounjaro and Zepbound revenue, production capacity updates, non-incretin product sales, and potential adjustments to the company's 2025 outlook. With LLY shares climbing 13.4% over the past 52 weeks and outpacing both the S&P 500 and healthcare sector, traders will watch for results that support the stock's current valuation premium.

Additionally, market watchers will examine GLP-1 market competition, ongoing research developments, and executive commentary regarding reimbursement and pricing for weight loss medications. The diabetes and obesity franchises drive Lilly's current expansion story alongside its oncology and immunology divisions.

As a $775 billion market cap healthcare giant, LLY often experiences significant stock moves following quarterly reports. For traders looking to position around these earnings-related price swings, Direxion's Single Stock Daily Leveraged & Inverse ETFs provide tactical instruments for short-term trading approaches.

Q1 2025 Financial Expectations

Analysts project Eli Lilly to post adjusted earnings of $4.11 per share, marking a substantial 59.3% jump from $2.58 in the prior-year period. The company approaches this report with positive momentum after exceeding Wall Street estimates in three of the last four quarters, including Q4's 5.8% earnings beat.

Revenue will attract particular attention following last quarter's impressive 45% year-over-year increase driven primarily by strong demand for Mounjaro and Zepbound. The analyst community will closely monitor any changes to Lilly's previously issued 2025 targets of up to $61 billion in revenue and GAAP EPS reaching $23.55, which exceeded consensus when announced.

Recent Quarterly Results

Lilly stock rose 3.4% after its Q4 2024 report when the company delivered adjusted EPS of $5.32 and revenue of $13.5 billion, both topping expectations. While GLP-1 medications fueled much of this growth, the company's other product lines still delivered impressive 20% expansion.

Looking ahead, Wall Street forecasts adjusted EPS of $23.21 for fiscal 2025, representing a 78.7% increase from $12.99 in fiscal 2024. This projected growth highlights Lilly's expanding footprint in the diabetes and obesity markets alongside its broader therapeutic portfolio.

Wall Street Outlook

Analysts maintain overwhelmingly positive views on Eli Lilly, with 21 of 25 analysts issuing "Strong Buy" ratings, one recommending "Moderate Buy," and only three suggesting "Hold." This favorable consensus suggests strong belief in Lilly's product lineup and future prospects.

The average price target stands at $1,016.26, suggesting a potential upside of about 23% from current levels around $825. This projected appreciation indicates analysts expect continued momentum despite the stock's notable performance over the last twelve months.

Trading Lilly's Results With Specialized ETFs

Eli Lilly's quarterly announcements typically trigger stock movement as the market evaluates sales data, pipeline developments, and forward guidance. Traders with strong convictions about LLY's upcoming report can use Direxion's recently introduced ETF products to establish leveraged long positions for potential earnings beats or inverse exposure for possible disappointments.

These trading products enable active market participants to implement precise strategies during high-volatility periods without requiring traditional margin accounts or short-selling capabilities.

Leveraged ETF Trading Options

Direxion's Eli Lilly ETFs, launched in March 2025, give short-term traders magnified or inverse exposure to LLY's daily price movements.

These instruments employ derivatives to reach specific daily objectives, making them particularly well-suited for high-impact events.

Bullish Strategy: ELIL

Direxion Daily LLY Bull 2X Shares (ELIL) allows traders to seek increased exposure on potential Eli Lilly gains. ELIL seeks 200% the daily movement of LLY through a portfolio built for enhanced exposure.

• Aims for 200% of LLY's daily performance, before fees and expenses
  • When Lilly rises 1%, ELIL seeks a 2% gain (before fees)
  • When Lilly falls 1%, ELIL seeks a 2% decline (before fees)
• Ideal for traders expecting robust GLP-1 sales or favorable outlook adjustments
• Designed for active traders who frequently review their positions

Bearish Strategy: ELIS

Direxion Daily LLY Bear 1X Shares (ELIS) provides inverse exposure to Lilly without short selling*. This makes ELIS particularly valuable for retirement account traders unable to establish short positions in IRAs or 401(k)s.

• Offers inverse (-1x), before fees and expenses, of the daily performance of LLY
  • When Lilly drops 1%, ELIS aims for a 1% gain (before fees)
  • When Lilly rises 1%, ELIS aims for a 1% loss (before fees)
• Well-suited for traders anticipating revenue misses or competitive headwinds
• Enables retirement account holders to make bearish trades within retirement accounts
• Functions as a tactical hedging tool for existing Lilly positions

Both ELIL and ELIS reset daily and perform best as short-term trading vehicles rather than long-term holdings. These products require active management and are built for traders who understand leverage mechanics and daily rebalancing effects.

*Short-selling is a trading strategy where investors borrow shares and sell them, hoping the stock price will fall.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stack rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock's performance over periods /anger than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will Jose money if the underlying stock's performance is flat, and it is possible that the Bull Fund will Jose money even if the underlying stock's performance increases. and the Bear Fund will lose money even if the underlying stock's performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in LLY.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund's investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund's other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with LLY and may increase the volatility of the Bull Fund.

Daily Correlation Risk - A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with LLY and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to LLY is impacted by LLY’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to LLY at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to LLY increases on days when LLY is volatile near the close of the trading day.

Daily Inverse Correlation Risk - A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with LLY and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to LLY is impacted by LLY’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to LLY at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to LLY increases on days when LLY is volatile near the close of the trading day.

Pharmaceutical Industry Risk - The profitability of pharmaceutical companies is highly dependent on the development, procurement and marketing of drugs and the development, protection and exploitation of intellectual property rights and other proprietary information. 

Healthcare Sector Risk - Companies in the healthcare sector may be affected by extensive, costly and uncertain government regulation, rising costs of medical products and services, and changes in the demand for medical products and services. 

Eli Lilly and Company Investing Risk — LLY faces risks associated with: costly and uncertain research and development of its products; maintaining intellectual property protections; intense competition from multinational pharmaceutical companies, biotechnology companies, and lower-cost generic and biosimilar manufacturers; among other risks.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily LLY Bear 1X Shares, Shorting or Inverse Risk.  Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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