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Eli Lilly (LLY) Gains But Lags Market: What You Should Know

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Eli Lilly (LLY) closed at $331.60 in the latest trading session, marking a +1.44% move from the prior day. This move lagged the S&P 500's daily gain of 1.92%. Elsewhere, the Dow gained 2.15%, while the tech-heavy Nasdaq added 0.16%.

Prior to today's trading, shares of the drugmaker had gained 13.48% over the past month. This has outpaced the Medical sector's gain of 5.68% and the S&P 500's gain of 1.54% in that time.

Eli Lilly will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2022. In that report, analysts expect Eli Lilly to post earnings of $1.87 per share. This would mark no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.9 billion, up 2.39% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.29 per share and revenue of $29.11 billion. These totals would mark changes of +1.59% and +2.81%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Eli Lilly. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.3% higher. Eli Lilly is currently a Zacks Rank #3 (Hold).

In terms of valuation, Eli Lilly is currently trading at a Forward P/E ratio of 39.41. This valuation marks a premium compared to its industry's average Forward P/E of 12.77.

Investors should also note that LLY has a PEG ratio of 2.26 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Large Cap Pharmaceuticals was holding an average PEG ratio of 1.91 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% 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.

To follow LLY in the coming trading sessions, be sure to utilize Zacks.com.


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