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Why Eli Lilly, Xilinx, and InterDigital Jumped Today

By Dan Caplinger - Dec 15, 2016 at 6:25PM

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On a solid day for the market, these stocks rose. Find out why.

The stock market bounced back on Thursday, regaining some of its lost ground from the previous day following news of an interest rate hike from the Federal Reserve. High rates helped send the U.S. dollar to levels it hasn't seen in nearly 15 years, and that had a positive influence on the overall market, even as it sent certain sectors, especially the gold market, down sharply.

Some individual stocks did quite well, and Eli Lilly (LLY 2.63%), Xilinx (XLNX), and InterDigital (IDCC 1.39%) were among the best performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.

Image source: Eli Lilly.

Lilly looks healthier

Eli Lilly climbed 5% after reassuring investors about its future growth prospects. The drugmaker essentially confirmed that its expectations for the rest of the decade remained intact, including revenue growth averaging at least 5% per year and ongoing increases in gross margin moving forward. Lilly also said that it remains committed to reducing operating expenses to less than half of revenue by 2018, while delivering dividend increases on an annual basis.

Even though the company suffered a setback when its solanezumab candidate treatment for Alzheimer's disease failed to reach its primary endpoint in phase 3 clinical trials, Lilly is optimistic about other prospects, including type-2 diabetes treatment Trulicity and cancer-fighter Cyramza. With adjusted earnings guidance remaining unchanged, at $3.50 to $3.60 per share for fiscal 2016, and new guidance for $4.05 to $4.15 in adjusted earnings for 2017, Lilly shareholders seemed pleased with the company's resiliency.

Xilinx gets an upgrade

Xilinx was up 6% in the wake of positive analyst comments. Analysts at Morgan Stanley upgraded the stock from equal weight to overweight, and they boosted their price target on the stock from $46 to $67 per share. As we saw with NVIDIA yesterday, Xilinx has the potential to benefit from the rise of the machine-learning sector in the semiconductor industry, opening the door to customized specialty chips that could help it improve its market share.

In particular, as the industry evolves toward more sophisticated applications, Xilinx has taken an early lead and has won confidence from key customers. If that trend fully takes hold, then Xilinx could continue to see big gains into 2017.

InterDigital looks forward to better results

Finally, InterDigital gained 7%. The mobile technology research-and-development company said that it has updated its fourth-quarter revenue guidance, now expecting $258 million to $268 million in sales for the period. Going forward, InterDigital said that it believes that its royalty platform should be able to bring in between $360 million and $380 million on an annual basis.

Overall, because of InterDigital's work in firming up agreements with top customers on an extended basis, CEO William Meritt believes that the company is "well-positioned to drive toward our goals of $500 million to $600 million in annual recurring revenue from our core terminal unit licensing business and $75 million to $100 million from our [Internet of Things] business." Investors were pleased with that news, as it points to a nice push higher for InterDigital in the long run.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Eli Lilly and Company Stock Quote
Eli Lilly and Company
$308.08 (2.63%) $7.89
InterDigital, Inc. Stock Quote
InterDigital, Inc.
$55.99 (1.39%) $0.77
Xilinx, Inc. Stock Quote
Xilinx, Inc.

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