ELI LILLY & CO (LLY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LLY - US5324571083 - Common Stock
1024.16 USD
+0.36 (+0.04%)
We assign a fundamental rating of 7 out of 10 to LLY. LLY was compared to 190 industry peers in the Pharmaceuticals industry. LLY has an excellent profitability rating, but there are some minor concerns on its financial health. LLY is not overvalued while it is showing excellent growth. This is an interesting combination. Finally LLY also has an excellent dividend rating. These ratings would make LLY suitable for dividend and growth investing!
1. Profitability
1.1 Basic Checks
- In the past year LLY was profitable.
- LLY had a positive operating cash flow in the past year.
- In the past 5 years LLY has always been profitable.
- In the past 5 years LLY always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of LLY (16.02%) is better than 95.79% of its industry peers.
- The Return On Equity of LLY (77.38%) is better than 99.47% of its industry peers.
- LLY has a Return On Invested Capital of 28.84%. This is amongst the best in the industry. LLY outperforms 97.89% of its industry peers.
- LLY had an Average Return On Invested Capital over the past 3 years of 21.71%. This is significantly above the industry average of 12.83%.
- The last Return On Invested Capital (28.84%) for LLY is above the 3 year average (21.71%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.02% | ||
| ROE | 77.38% | ||
| ROIC | 28.84% |
ROA(3y)11.42%
ROA(5y)11.8%
ROE(3y)60.64%
ROE(5y)70.77%
ROIC(3y)21.71%
ROIC(5y)19.96%
1.3 Margins
- LLY has a better Profit Margin (30.99%) than 94.74% of its industry peers.
- LLY's Profit Margin has declined in the last couple of years.
- The Operating Margin of LLY (44.41%) is better than 98.42% of its industry peers.
- In the last couple of years the Operating Margin of LLY has grown nicely.
- The Gross Margin of LLY (83.03%) is better than 86.84% of its industry peers.
- LLY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.41% | ||
| PM (TTM) | 30.99% | ||
| GM | 83.03% |
OM growth 3Y12.38%
OM growth 5Y7.84%
PM growth 3Y6.05%
PM growth 5Y-8.8%
GM growth 3Y3.11%
GM growth 5Y0.62%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), LLY is creating value.
- Compared to 1 year ago, LLY has about the same amount of shares outstanding.
- The number of shares outstanding for LLY has been reduced compared to 5 years ago.
- LLY has a worse debt/assets ratio than last year.
2.2 Solvency
- LLY has an Altman-Z score of 8.15. This indicates that LLY is financially healthy and has little risk of bankruptcy at the moment.
- LLY has a better Altman-Z score (8.15) than 81.58% of its industry peers.
- The Debt to FCF ratio of LLY is 6.60, which is on the high side as it means it would take LLY, 6.60 years of fcf income to pay off all of its debts.
- LLY's Debt to FCF ratio of 6.60 is amongst the best of the industry. LLY outperforms 80.53% of its industry peers.
- LLY has a Debt/Equity ratio of 1.72. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.72, LLY is not doing good in the industry: 76.84% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.72 | ||
| Debt/FCF | 6.6 | ||
| Altman-Z | 8.15 |
ROIC/WACC3.11
WACC9.27%
2.3 Liquidity
- LLY has a Current Ratio of 1.55. This is a normal value and indicates that LLY is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of LLY (1.55) is worse than 71.58% of its industry peers.
- LLY has a Quick Ratio of 1.24. This is a normal value and indicates that LLY is financially healthy and should not expect problems in meeting its short term obligations.
- LLY has a worse Quick ratio (1.24) than 72.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 116.22% over the past year.
- Measured over the past years, LLY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.57% on average per year.
- LLY shows a strong growth in Revenue. In the last year, the Revenue has grown by 45.41%.
- Measured over the past years, LLY shows a quite strong growth in Revenue. The Revenue has been growing by 15.08% on average per year.
EPS 1Y (TTM)116.22%
EPS 3Y16.75%
EPS 5Y16.57%
EPS Q2Q%494.92%
Revenue 1Y (TTM)45.41%
Revenue growth 3Y16.73%
Revenue growth 5Y15.08%
Sales Q2Q%53.87%
3.2 Future
- Based on estimates for the next years, LLY will show a very strong growth in Earnings Per Share. The EPS will grow by 32.61% on average per year.
- LLY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.64% yearly.
EPS Next Y84.93%
EPS Next 2Y59.63%
EPS Next 3Y46.9%
EPS Next 5Y32.61%
Revenue Next Year41.38%
Revenue Next 2Y31.01%
Revenue Next 3Y26.06%
Revenue Next 5Y19.64%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 46.57, which means the current valuation is very expensive for LLY.
- 76.84% of the companies in the same industry are more expensive than LLY, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 28.60. LLY is valued rather expensively when compared to this.
- A Price/Forward Earnings ratio of 30.92 indicates a quite expensive valuation of LLY.
- 72.63% of the companies in the same industry are more expensive than LLY, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, LLY is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.57 | ||
| Fwd PE | 30.92 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, LLY is valued a bit cheaper than the industry average as 78.42% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, LLY is valued a bit cheaper than the industry average as 74.21% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 150.43 | ||
| EV/EBITDA | 35.36 |
4.3 Compensation for Growth
- LLY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- LLY has an outstanding profitability rating, which may justify a higher PE ratio.
- LLY's earnings are expected to grow with 46.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.55
PEG (5Y)2.81
EPS Next 2Y59.63%
EPS Next 3Y46.9%
5. Dividend
5.1 Amount
- LLY has a yearly dividend return of 0.64%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.46, LLY pays a better dividend. On top of this LLY pays more dividend than 88.95% of the companies listed in the same industry.
- With a Dividend Yield of 0.64, LLY pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
- The dividend of LLY is nicely growing with an annual growth rate of 15.59%!
- LLY has paid a dividend for at least 10 years, which is a reliable track record.
- LLY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)15.59%
Div Incr Years10
Div Non Decr Years34
5.3 Sustainability
- LLY pays out 28.28% of its income as dividend. This is a sustainable payout ratio.
- The dividend of LLY is growing, but earnings are growing more, so the dividend growth is sustainable.
DP28.28%
EPS Next 2Y59.63%
EPS Next 3Y46.9%
ELI LILLY & CO / LLY FAQ
Can you provide the ChartMill fundamental rating for ELI LILLY & CO?
ChartMill assigns a fundamental rating of 7 / 10 to LLY.
What is the valuation status of ELI LILLY & CO (LLY) stock?
ChartMill assigns a valuation rating of 6 / 10 to ELI LILLY & CO (LLY). This can be considered as Fairly Valued.
What is the profitability of LLY stock?
ELI LILLY & CO (LLY) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for LLY stock?
The Price/Earnings (PE) ratio for ELI LILLY & CO (LLY) is 46.57 and the Price/Book (PB) ratio is 40.69.
What is the earnings growth outlook for ELI LILLY & CO?
The Earnings per Share (EPS) of ELI LILLY & CO (LLY) is expected to grow by 84.93% in the next year.