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Eli Lilly (LLY) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Eli Lilly (LLY) closed at $150.08, marking a +0.72% move from the previous day. This move outpaced the S&P 500's daily gain of 0.52%. Meanwhile, the Dow gained 0.01%, and the Nasdaq, a tech-heavy index, added 1.21%.

Heading into today, shares of the drugmaker had lost 1.67% over the past month, lagging the Medical sector's of 0% and the S&P 500's gain of 0.49% in that time.

LLY will be looking to display strength as it nears its next earnings release. On that day, LLY is projected to report earnings of $1.76 per share, which would represent year-over-year growth of 18.92%. Meanwhile, our latest consensus estimate is calling for revenue of $5.88 billion, up 7.28% from the prior-year quarter.

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.

Investors might also notice recent changes to analyst estimates for LLY. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. LLY is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that LLY has a Forward P/E ratio of 20.43 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.89.

It is also worth noting that LLY currently has a PEG ratio of 1.31. 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 2.06 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 126, putting it in the top 50% 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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