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

Zacks Equity Research

Eli Lilly (LLY) closed the most recent trading day at $141.43, moving +0.23% from the previous trading session. This move lagged the S&P 500's daily gain of 0.84%. Elsewhere, the Dow gained 0.92%, while the tech-heavy Nasdaq added 1.06%.

Coming into today, shares of the drugmaker had gained 8.98% in the past month. In that same time, the Medical sector gained 2.79%, while the S&P 500 gained 3.95%.

Wall Street will be looking for positivity from LLY as it approaches its next earnings report date. This is expected to be January 30, 2020. In that report, analysts expect LLY to post earnings of $1.49 per share. This would mark year-over-year growth of 12.03%. Our most recent consensus estimate is calling for quarterly revenue of $6.07 billion, down 5.69% from the year-ago period.

Investors should also note any recent changes to analyst estimates for LLY. These revisions help to show the ever-changing nature of 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 2.88% higher. LLY is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, LLY is currently trading at a Forward P/E ratio of 20.86. Its industry sports an average Forward P/E of 15.93, so we one might conclude that LLY is trading at a premium comparatively.

Investors should also note that LLY has a PEG ratio of 1.84 right now. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 1.95 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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