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

Zacks Equity Research

Eli Lilly (LLY) closed at $162.72 in the latest trading session, marking a -0.07% move from the prior day. This change lagged the S&P 500's 1.47% gain on the day. At the same time, the Dow added 2.32%, and the tech-heavy Nasdaq gained 1.2%.

Heading into today, shares of the drugmaker had gained 8.08% over the past month, outpacing the Medical sector's loss of 0.38% and the S&P 500's gain of 0.74% in that time.

Wall Street will be looking for positivity from LLY as it approaches its next earnings report date. This is expected to be July 30, 2020. On that day, LLY is projected to report earnings of $1.58 per share, which would represent year-over-year growth of 5.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.81 billion, up 3.12% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.82 per share and revenue of $24 billion, which would represent changes of +12.91% and +7.51%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for LLY. These revisions help to show the ever-changing nature of 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 0.1% higher within the past month. LLY is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, LLY currently has a Forward P/E ratio of 23.89. This represents a premium compared to its industry's average Forward P/E of 14.63.

Meanwhile, LLY's PEG ratio is currently 1.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.08 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 29, which puts it in the top 12% 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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