ELI LILLY & CO (LLY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LLY - US5324571083 - Common Stock
1064.29 USD
-23.09 (-2.12%)
1065 USD
+0.71 (+0.07%)
We assign a fundamental rating of 7 out of 10 to LLY. LLY was compared to 191 industry peers in the Pharmaceuticals industry. LLY scores excellent on profitability, 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. With these ratings, LLY could be worth investigating further for dividend and growth investing!.
1. Profitability
1.1 Basic Checks
- In the past year LLY was profitable.
- In the past year LLY had a positive cash flow from operations.
- LLY had positive earnings in each of the past 5 years.
- LLY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of LLY (16.02%) is better than 95.81% of its industry peers.
- LLY has a better Return On Equity (77.38%) than 99.48% of its industry peers.
- With an excellent Return On Invested Capital value of 28.84%, LLY belongs to the best of the industry, outperforming 97.91% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for LLY is significantly above the industry average of 12.83%.
- The 3 year average ROIC (21.71%) for LLY is below the current ROIC(28.84%), indicating increased profibility in the last year.
| 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
- Looking at the Profit Margin, with a value of 30.99%, LLY belongs to the top of the industry, outperforming 94.76% of the companies in the same industry.
- LLY's Profit Margin has declined in the last couple of years.
- LLY has a better Operating Margin (44.41%) than 98.43% of its industry peers.
- LLY's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 83.03%, LLY belongs to the top of the industry, outperforming 86.91% of the companies in the same industry.
- In the last couple of years the Gross Margin of LLY has remained more or less at the same level.
| 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LLY is creating value.
- LLY has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, LLY has less shares outstanding
- The debt/assets ratio for LLY is higher compared to a year ago.
2.2 Solvency
- LLY has an Altman-Z score of 8.54. This indicates that LLY is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of LLY (8.54) is better than 80.63% 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.
- With an excellent Debt to FCF ratio value of 6.60, LLY belongs to the best of the industry, outperforming 80.63% of the companies in the same industry.
- A Debt/Equity ratio of 1.72 is on the high side and indicates that LLY has dependencies on debt financing.
- LLY has a Debt to Equity ratio of 1.72. This is in the lower half of the industry: LLY underperforms 76.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.72 | ||
| Debt/FCF | 6.6 | ||
| Altman-Z | 8.54 |
ROIC/WACC3.1
WACC9.3%
2.3 Liquidity
- A Current Ratio of 1.55 indicates that LLY should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.55, LLY is doing worse than 71.73% of the companies in the same industry.
- A Quick Ratio of 1.24 indicates that LLY should not have too much problems paying its short term obligations.
- LLY's Quick ratio of 1.24 is on the low side compared to the rest of the industry. LLY is outperformed by 72.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
- LLY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 116.22%, which is quite impressive.
- 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.
- Looking at the last year, LLY shows a very strong growth in Revenue. The Revenue has grown by 45.41%.
- LLY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.08% yearly.
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
- The Earnings Per Share is expected to grow by 32.61% on average over the next years. This is a very strong growth
- 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 Y84.97%
EPS Next 2Y58.86%
EPS Next 3Y46.26%
EPS Next 5Y32.61%
Revenue Next Year41.38%
Revenue Next 2Y31.06%
Revenue Next 3Y26.04%
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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 48.40, which means the current valuation is very expensive for LLY.
- 76.44% of the companies in the same industry are more expensive than LLY, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of LLY to the average of the S&P500 Index (27.21), we can say LLY is valued expensively.
- Based on the Price/Forward Earnings ratio of 32.44, the valuation of LLY can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of LLY indicates a somewhat cheap valuation: LLY is cheaper than 72.25% of the companies listed in the same industry.
- LLY's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.4 | ||
| Fwd PE | 32.44 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LLY indicates a somewhat cheap valuation: LLY is cheaper than 78.53% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of LLY indicates a somewhat cheap valuation: LLY is cheaper than 74.35% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 156.32 | ||
| EV/EBITDA | 37.49 |
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.
- The excellent profitability rating of LLY may justify a higher PE ratio.
- LLY's earnings are expected to grow with 46.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.57
PEG (5Y)2.92
EPS Next 2Y58.86%
EPS Next 3Y46.26%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.67%, LLY is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.40, LLY pays a better dividend. On top of this LLY pays more dividend than 89.53% of the companies listed in the same industry.
- With a Dividend Yield of 0.67, LLY pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
5.2 History
- On average, the dividend of LLY grows each year by 15.59%, which is quite nice.
- LLY has paid a dividend for at least 10 years, which is a reliable track record.
- LLY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y58.86%
EPS Next 3Y46.26%
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 5 / 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 48.4 and the Price/Book (PB) ratio is 42.29.
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 84.97% in the next year.