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

Zacks Equity Research
·3 min read

Eli Lilly (LLY) closed the most recent trading day at $166.32, moving +0.5% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.71%. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 0.95%.

Prior to today's trading, shares of the drugmaker had gained 12.26% over the past month. This has outpaced the Medical sector's loss of 1.41% and the S&P 500's gain of 0.17% in that time.

Wall Street will be looking for positivity from LLY as it approaches its next earnings report date. The company is expected to report EPS of $2.34, up 35.26% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.23 billion, up 18.2% from the year-ago period.

Any recent changes to analyst estimates for LLY should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.45% higher. LLY is currently a Zacks Rank #3 (Hold).

In terms of valuation, LLY is currently trading at a Forward P/E ratio of 20.73. Its industry sports an average Forward P/E of 13.94, so we one might conclude that LLY is trading at a premium comparatively.

Also, we should mention that LLY has a PEG ratio of 1.42. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.06 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% 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.

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


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