Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Eli Lilly and Co LLY in comparison to its major competitors within the Pharmaceuticals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Eli Lilly and Co | 128.61 | 65.84 | 19.75 | 19.91% | $3.03 | $7.57 | 28.1% |
| Novo Nordisk A/S | 46.31 | 36.11 | 16.69 | 22.01% | $28.51 | $55.85 | 36.95% |
| Merck & Co Inc | 894.50 | 8.44 | 5.31 | -3.11% | $-0.77 | $10.72 | 5.78% |
| AstraZeneca PLC | 35.88 | 5.41 | 4.66 | 2.52% | $2.18 | $9.72 | 7.29% |
| Novartis AG | 22.58 | 4.05 | 4.15 | 19.99% | $4.18 | $8.75 | 7.39% |
| Pfizer Inc | 68.62 | 1.62 | 2.45 | -3.62% | $-1.77 | $6.69 | -41.34% |
| Sanofi SA | 19.89 | 1.44 | 2.31 | -0.75% | $0.42 | $8.15 | 6.5% |
| Bristol-Myers Squibb Co | 12.51 | 3.33 | 2.23 | 6.03% | $4.45 | $8.73 | 0.62% |
| GSK PLC | 13.17 | 4.84 | 2.14 | 2.64% | $1.16 | $5.63 | 9.16% |
| Zoetis Inc | 30.20 | 14 | 8.28 | 10.42% | $0.83 | $1.49 | 8.48% |
| Takeda Pharmaceutical Co Ltd | 36.21 | 0.95 | 1.54 | 1.53% | $314.89 | $731.71 | 1.33% |
| Viatris Inc | 222.20 | 0.64 | 0.87 | -3.7% | $-0.07 | $1.6 | -1.0% |
| Dr Reddy's Laboratories Ltd | 18.94 | 3.69 | 3.64 | 5.29% | $22.42 | $42.2 | 6.57% |
| Jazz Pharmaceuticals PLC | 17.91 | 1.82 | 2.05 | 2.61% | $0.29 | $0.9 | 4.1% |
| Corcept Therapeutics Inc | 24.13 | 4.65 | 5.25 | 6.43% | $0.03 | $0.13 | 31.39% |
| Average | 104.5 | 6.5 | 4.4 | 4.88% | $26.91 | $63.73 | 5.94% |
By closely studying Eli Lilly and Co, we can observe the following trends:
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Notably, the current Price to Earnings ratio for this stock, 128.61, is 1.23x above the industry norm, reflecting a higher valuation relative to the industry.
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With a Price to Book ratio of 65.84, which is 10.13x the industry average, Eli Lilly and Co might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The stock's relatively high Price to Sales ratio of 19.75, surpassing the industry average by 4.49x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 19.91% that is 15.03% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.03 Billion, which is 0.11x below the industry average, potentially indicating lower profitability or financial challenges.
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The gross profit of $7.57 Billion is 0.12x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 28.1%, outperforming the industry average of 5.94%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.
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.
When assessing Eli Lilly and Co against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Among its top 4 peers, Eli Lilly and Co has a higher debt-to-equity ratio of 2.34.
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This implies a greater reliance on debt financing, which can expose the company to higher financial risk and potential challenges.
Key Takeaways
For Eli Lilly and Co in the Pharmaceuticals industry, the PE, PB, and PS ratios are all high compared to its peers, indicating potentially overvalued stock. On the other hand, the high ROE and revenue growth suggest strong profitability and future prospects. However, the low EBITDA and gross profit levels may raise concerns about operational efficiency and cost management within the company.
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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