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Eli Lilly (LLY) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 mins read

Eli Lilly (LLY) closed at $151.18 in the latest trading session, marking a -1.94% move from the prior day. This move lagged the S&P 500's daily loss of 1.16%. Meanwhile, the Dow lost 1.84%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Coming into today, shares of the drugmaker had gained 1.87% in the past month. In that same time, the Medical sector lost 0.29%, while the S&P 500 lost 1.96%.

Wall Street will be looking for positivity from LLY as it approaches its next earnings report date. In that report, analysts expect LLY to post earnings of $1.76 per share. This would mark year-over-year growth of 18.92%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.88 billion, up 7.28% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.29 per share and revenue of $23.83 billion. These totals would mark changes of +20.7% and +6.77%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for LLY. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. LLY currently has a Zacks Rank of #3 (Hold).

Investors should also note LLY's current valuation metrics, including its Forward P/E ratio of 21.14. Its industry sports an average Forward P/E of 15.09, so we one might conclude that LLY is trading at a premium comparatively.

Meanwhile, LLY's PEG ratio is currently 1.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LLY's industry had an average PEG ratio of 2.09 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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