Guidance Watch: 2 Companies Bullishly Raising Forecasts

The 2025 Q2 earnings cycle is slowly winding down, which has been resilient so far.

For the 457 S&P 500 companies that have reported Q2 results as of August 13th, total earnings are up +11.6% from the same period last year on +5.8% higher revenues, with 80.5% beating EPS estimates and 78.8% beating revenue estimates.

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Earnings Outlook Remains Strong & Improving: A Closer Look

So far, several companies, including Palantir PLTR and Eli Lilly LLY have raised guidance, reflecting positivity surrounding their results. Let’s take a closer look at what drove the strong quarters.  

Palantir Keeps Cruising

Palantir has rapidly become one of the top AI stocks for investors, with robust quarterly results stemming from red-hot demand paving a highly positive outlook. It crushed our quarterly expectations in near early August, posting a 15% EPS beat alongside a 7% positive sales surprise.

US commercial revenue grew 93% YoY throughout its latest quarter, with US government revenue also up an impressive 53%. Total sales grew 48% year-over-year, continuing the recent streak of outsized growth.

The company delivered a slew of guidance upgrades concerning its FY25, including revenue, US commercial revenue, adjusted income from operations, and adjusted free cash flow. Analysts adjusted their sales expectations accordingly, with the updated figure suggest 45% YoY growth.

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The stock remains a prime selection for those seeking high-growth AI exposure, with consensus expectations for its current fiscal year suggesting 60% EPS growth on 45% higher sales. Analysts have raised their EPS expectations across the board following the recent guidance upgrade, a bullish sign concerning near-term price action.

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LLY Insiders Dive In

LLY shares have faced pressure in 2025 so far, down 11% overall and widely underperforming relative to the S&P 500. But shares have shown nice life off the post-earnings lows so far, undoubtedly a positive takeaway following the guidance upgrade.

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LLY posted Q2 sales of $15.5 billion, up 38% YoY and reflecting a 6% surprise relative to the Zacks Consensus sales estimates. Volume growth across Zepbound and Mounjaro helped lead the positive quarter, with sales of each up 172% and 68%, respectively.

Below is a chart illustrating the company’s sales on a quarterly basis.

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The favorable results led LLY to increase its FY25 revenue and adjusted EPS guidance, with its gross margin also moving higher to 84.3% vs the 80.8% mark in the year-ago period. Analysts have revised EPS expectations positively following the release, a bullish sign concerning near-term price action.

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Several directors and the CEO have purchased shares post-earnings, likely a reflection of their confidence in the long-term outlook. 

Bottom Line

The 2025 Q2 earnings season is slowly grinding to a halt, which has been largely positive so far. Earnings expectations for the current period (Q3) have trickled higher, a positive development.

And throughout the Q2 cycle, several companies – Eli Lilly LLY and Palantir PLTR – partly stole the spotlight, reporting strong results and upping their guidance.

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This article originally published on Zacks Investment Research (zacks.com).

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Source Zacks-com