Assessing Eli Lilly and Co's Performance Against Competitors In Pharmaceuticals Industry

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.

By closely examining Eli Lilly and Co, we can identify the following trends:

• The current Price to Earnings ratio of 132.7 is 1.18x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 67.89 which exceeds the industry average by 8.68x.

• With a relatively high Price to Sales ratio of 20.37, which is 4.06x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 19.91% that is 12.27% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.03 Billion, which is 0.13x below the industry average, the company may face lower profitability or financial challenges.

• With lower gross profit of $7.57 Billion, which indicates 0.11x below the industry average, the company may experience lower revenue after accounting for production costs.

• With a revenue growth of 28.1%, which surpasses the industry average of 7.02%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.

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 examining Eli Lilly and Co in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• Eli Lilly and Co has a relatively higher debt-to-equity ratio of 2.34 compared to its top 4 peers.

• This could indicate a higher financial risk as the company is more reliant on borrowed funds, and investors may perceive it as a potential concern.

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 may raise concerns about operational efficiency and sustainability. Overall, Eli Lilly and Co shows mixed performance in comparison to its industry peers based on these financial ratios.

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