Analyzing Eli Lilly and Co In Comparison To Competitors In Pharmaceuticals Industry

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Eli Lilly and Co LLY vis-à-vis its key competitors in the Pharmaceuticals industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 conducting an in-depth analysis of Eli Lilly and Co, we can identify the following trends:

• The Price to Earnings ratio of 120.94 for this company is 3.07x above the industry average, indicating a premium valuation associated with the stock.

• The elevated Price to Book ratio of 57.71 relative to the industry average by 6.66x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 20.65, surpassing the industry average by 3.75x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 19.02%, which is 11.49% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.12 Billion, which is 0.21x below the industry average. This potentially indicates lower profitability or financial challenges.

• The company has lower gross profit of $7.09 Billion, which indicates 0.1x below the industry average. This potentially indicates lower revenue after accounting for production costs.

• The company is experiencing remarkable revenue growth, with a rate of 25.98%, outperforming the industry average of 12.02%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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 evaluating Eli Lilly and Co against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

• Eli Lilly and Co has a relatively higher debt-to-equity ratio of 2.05 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.

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