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

Zacks Equity Research
·3 mins read

Eli Lilly (LLY) closed the most recent trading day at $146.63, moving +0.98% from the previous trading session. This move lagged the S&P 500's daily gain of 1.8%. At the same time, the Dow added 1.68%, and the tech-heavy Nasdaq gained 2.33%.

Coming into today, shares of the drugmaker had lost 2.56% in the past month. In that same time, the Medical sector lost 2.81%, while the S&P 500 lost 6.31%.

Wall Street will be looking for positivity from LLY as it approaches its next earnings report date. This is expected to be October 27, 2020. The company is expected to report EPS of $1.78, up 20.27% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.90 billion, up 7.78% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.32 per share and revenue of $23.86 billion, which would represent changes of +21.19% and +6.9%, respectively, from the prior year.

Any recent changes to analyst estimates for LLY should also be noted by investors. 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. 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.

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. The Zacks Consensus EPS estimate has moved 0.36% higher within the past month. LLY is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, LLY currently has a Forward P/E ratio of 19.84. Its industry sports an average Forward P/E of 14.3, so we one might conclude that LLY is trading at a premium comparatively.

Meanwhile, LLY's PEG ratio is currently 1.26. 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 industry currently had an average PEG ratio of 1.98 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 194, putting it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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