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Evaluating Eli Lilly and Co Against Peers In Pharmaceuticals Industry

Published 17/05/2024, 16:00
© Reuters.  Evaluating Eli Lilly and Co Against Peers In Pharmaceuticals Industry
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Benzinga - by Benzinga Insights, Benzinga Staff Writer.

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Eli Lilly and Co (NYSE:LLY) against its key competitors in the Pharmaceuticals industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

Eli Lilly and Co Background Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly's key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for diabetes; and Taltz and Olumiant for immunology.

CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth
Eli Lilly and Co 113.57 57.20 19.39 19.02% $3.12 $7.09 25.98%
Novo Nordisk A/S 46.10 41.34 16.85 24.73% $36.91 $55.43 22.45%
Johnson & Johnson 22.92 5.30 4.53 4.69% $5.68 $14.87 2.34%
Merck & Co Inc 145.42 8.21 5.43 12.22% $6.96 $12.23 8.89%
AstraZeneca PLC 38.04 6.38 5.05 5.69% $4.47 $10.46 16.55%
Novartis AG 23.34 5.28 4.47 6.23% $4.66 $9.02 9.71%
GSK PLC 16.39 5.25 2.39 2.64% $2.07 $5.39 9.16%
Zoetis Inc 33.47 15.67 9.17 11.91% $0.93 $1.55 9.5%
Takeda Pharmaceutical Co Ltd 45.71 0.90 1.54 -0.04% $186.41 $668.37 -5.43%
Dr Reddy's Laboratories Ltd 17.30 3.41 3.46 4.76% $20.32 $49.91 -1.83%
Jazz Pharmaceuticals PLC 22.88 1.88 1.99 -0.39% $0.23 $0.81 1.03%
Prestige Consumer Healthcare Inc 15.58 1.96 2.90 3.04% $0.09 $0.15 -3.11%
Corcept Therapeutics Inc 26.23 5.23 5.81 5.22% $0.03 $0.14 38.95%
Indivior PLC 433.50 234.32 2.18 940.0% $0.08 $0.24 12.25%
Average 68.22 25.78 5.06 78.52% $20.68 $63.74 9.27%
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.dividend-frequency { font-size: 12px; color: #6c757d; } Through an analysis of Eli Lilly and Co, we can infer the following trends:

  • At 113.57, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.66x, suggesting a premium valuation relative to industry peers.

  • It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 57.2 which exceeds the industry average by 2.22x.

  • The Price to Sales ratio of 19.39, which is 3.83x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • The company has a lower Return on Equity (ROE) of 19.02%, which is 59.5% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

  • The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.12 Billion is 0.15x below the industry average, suggesting potential lower profitability or financial challenges.

  • The gross profit of $7.09 Billion is 0.11x below that of its industry, suggesting potential lower revenue after accounting for production costs.

  • The company's revenue growth of 25.98% is notably higher compared to the industry average of 9.27%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By analyzing Eli Lilly and Co in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

  • Eli Lilly and Co is positioned in the middle in terms of the debt-to-equity ratio compared to its top 4 peers.

  • This suggests a balanced financial structure, where the company maintains a moderate level of debt while also relying on equity financing with a debt-to-equity ratio of 2.05.

Key Takeaways For Eli Lilly and Co, the PE, PB, and PS ratios are all high compared to its peers in the Pharmaceuticals industry, indicating that the stock may be overvalued. The low ROE, EBITDA, and gross profit suggest that the company is not efficiently utilizing its resources and generating lower returns. However, the high revenue growth rate shows potential for future expansion and market competitiveness within the industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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