Eli Lilly & Co (LLY) AI Stock Analysis

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Eli Lilly & Co

(NYSE:LLY)

72Outperform

Eli Lilly & Co scores a solid 72, driven by strong financial performance and a positive earnings outlook. The company's robust revenue growth, effective cash management, and strategic investments in manufacturing bolster its position. However, high leverage and valuation concerns, along with mixed technical indicators, suggest a need for cautious optimism. The company is poised for growth, yet investors should monitor potential regulatory and market challenges.

Positive Factors

Analyst Rating

Analyst believes the market reaction was overdone and reiterates an outperform rating on LLY.

Market Position

The company remains in the pole position in the anti-obesity market with a growing use case globally for its innovative portfolio of weight-loss assets where LLY is expected to remain the frontrunner.

Sales Forecast

Compelling initial Phase 3 trial results led to an increase in orforglipron 2030 sales estimates by 50%.

Negative Factors

Formulary Decision

The stock weakness is primarily due to CVS Caremark's partnership with NVO and the decision to make Wegovy the preferred treatment on its largest commercial formularies.

Market Reaction

LLY shares declined 11.7% due to CVS Caremark’s action favoring Wegovy over Zepbound.

Price Target

The price target for Eli Lilly was lowered from $989 to $944, indicating reduced expectations for stock performance.

Eli Lilly & Co (LLY) vs. S&P 500 (SPY)

Market Cap

$734.61B

Dividend Yield0.7%

Average Volume (3M)4.07M

Price to Earnings (P/E)68.0

Beta (1Y)0.62

Revenue Growth36.38%

EPS Growth80.73%

CountryUS

Employees47,000

SectorHealthcare

Sector Strength53

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)3.34

Shares Outstanding947,735,660

10 Day Avg. Volume4,397,562

30 Day Avg. Volume4,070,634

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.06

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit21.28

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$981.00

Price Target Upside26.30% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

Eli Lilly & Co Business Overview & Revenue Model

Company DescriptionEli Lilly & Co (LLY) is a global pharmaceutical company that discovers, develops, manufactures, and markets products in human health. The company focuses on several key therapeutic areas, including diabetes, oncology, immunology, neurodegeneration, and pain management. With a robust portfolio of innovative medicines, Eli Lilly aims to improve patient outcomes and address unmet medical needs worldwide.

How the Company Makes MoneyEli Lilly & Co generates revenue primarily through the sale of pharmaceutical products. The company's revenue model is centered around developing and commercializing proprietary medications, which are either marketed directly by Eli Lilly or through partnerships and collaborations. Key revenue streams include sales from their flagship diabetes medications like Trulicity and Humalog, oncology treatments such as Verzenio, and other therapies across immunology and pain management. Additionally, strategic partnerships and collaborations, including licensing agreements and joint ventures, contribute to the company's earnings. Factors such as regulatory approvals, patent protections, and market expansions also play a significant role in Eli Lilly's revenue generation.

Eli Lilly & Co Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how much revenue each business unit or product line contributes, highlighting strengths and potential growth areas within the company’s diverse operations.

Chart InsightsEli Lilly's Diabetes segment is experiencing significant growth, driven by strong sales of Mounjaro and Zepbound, which are key contributors to the company's overall revenue increase. The earnings call highlights robust financial performance and strategic manufacturing investments, yet notes challenges such as regulatory hurdles and market dynamics in obesity treatments. Despite these challenges, the company's focus on expanding its product pipeline and manufacturing capabilities suggests a positive outlook, particularly with anticipated regulatory submissions for obesity treatments by the end of 2025.

Data provided by:

Main Street Data

Eli Lilly & Co Financial Statement Overview

Summary

Eli Lilly & Co exhibits strong financial health with impressive revenue and profit growth, robust margins, and a high ROE. The company effectively manages cash flows, with notable improvements in free cash flow. However, the high leverage and relatively low equity ratio suggest careful monitoring of financial obligations. Overall, the company is well-positioned for continued growth, but should remain vigilant regarding its debt levels.

Income Statement

Very Positive

Eli Lilly & Co has demonstrated strong revenue growth with a significant increase in Total Revenue from $45.04B to $49.00B TTM (Trailing-Twelve-Months), representing a growth rate of 8.77%. Gross Profit Margin is robust at 81.69%, and Net Profit Margin has improved to 22.67%. The EBIT Margin is healthy at 41.17%, and EBITDA Margin stands at 36.35%. Overall, the income statement reflects strong profitability and growth trends, positioning the company well within its industry.

Balance Sheet

Positive

The balance sheet shows a moderate Debt-to-Equity Ratio of 2.44, indicating a higher leverage position which poses some risk. However, the Return on Equity (ROE) is impressive at 70.48%, reflecting strong profitability relative to shareholder equity. The Equity Ratio is relatively low at 17.64%, suggesting limited equity financing. While profitability metrics are strong, the high leverage warrants cautious monitoring.

Cash Flow

Positive

Free Cash Flow has grown significantly to $1.21B TTM, a notable improvement from previous periods. The Operating Cash Flow to Net Income Ratio is 0.84, indicating efficient cash generation from operations. Free Cash Flow to Net Income Ratio is 0.11, highlighting room for improvement in converting income to free cash. Overall, cash flow metrics are solid, with positive growth trends in free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
45.04B	34.12B	28.54B	28.32B	24.54B
	Gross Profit
36.62B	27.04B	21.91B	21.01B	19.06B
	EBIT
17.50B	10.33B	7.13B	6.36B	6.06B
	EBITDA
15.23B	8.57B	8.66B	8.04B	8.91B
	Net Income Common Stockholders
10.59B	5.24B	6.24B	5.58B	6.19B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.42B	2.93B	2.21B	3.91B	3.68B
	Total Assets
78.71B	64.01B	49.49B	48.81B	46.63B
	Total Debt
33.64B	25.23B	16.24B	16.88B	16.60B
	Net Debt
30.38B	22.41B	14.17B	13.07B	12.94B
	Total Liabilities
64.44B	53.14B	38.71B	39.65B	40.81B
	Stockholders Equity
14.19B	10.77B	10.65B	8.98B	5.64B
Cash Flow		Free Cash Flow
414.30M	-3.15B	4.60B	5.39B	4.47B
	Operating Cash Flow
8.82B	4.24B	7.08B	7.26B	6.50B
	Investing Cash Flow
-9.30B	-7.15B	-3.26B	-2.76B	-2.26B
	Financing Cash Flow
1.23B	3.50B	-5.41B	-4.13B	-3.14B

Eli Lilly & Co Technical Analysis

Technical Analysis Sentiment

Negative

Last Price776.72

Price Trends

50DMA

826.58

Negative

100DMA

815.63

Negative

200DMA

840.31

Negative

Market Momentum

MACD

0.45

Positive

RSI

43.66

Neutral

STOCH

11.68

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LLY, the sentiment is Negative. The current price of 776.72 is below the 20-day moving average (MA) of 808.26, below the 50-day MA of 826.58, and below the 200-day MA of 840.31, indicating a bearish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 43.66 is Neutral, neither overbought nor oversold. The STOCH value of 11.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LLY.

Eli Lilly & Co Risk Analysis

Eli Lilly & Co disclosed 16 risk factors in its most recent earnings report. Eli Lilly & Co reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Eli Lilly & Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVO	83 Outperform	$297.66B	21.02	87.53%	1.78%	22.74%	16.36%
JNJ	79 Outperform	$372.25B	17.23	29.45%	3.21%	-0.37%	29.21%
AZN	78 Outperform	$221.49B	28.75	19.81%	2.16%	15.48%	22.70%
MRK	76 Outperform	$198.47B	12.06	39.31%	4.00%	4.40%	654.93%
LLY	72 Outperform	$734.61B	68.05	77.73%	0.70%	36.38%	80.73%
ABBV	70 Outperform	$331.06B	83.41	61.94%	3.41%	5.45%	―
Sector *	52 Neutral	$5.23B	3.70	-41.86%	2.84%	16.58%	-0.16%

* Healthcare Sector Average

Performance Comparison

LLY

Eli Lilly & Co

776.72

10.15

1.32%

AZN

AstraZeneca

67.30

-8.78

-11.54%

JNJ

Johnson & Johnson

155.66

10.47

7.21%

MRK

Merck & Company

79.12

-47.36

-37.44%

NVO

Novo Nordisk

64.85

-62.01

-48.88%

ABBV

AbbVie

188.09

33.31

21.52%

Eli Lilly & Co Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: -13.60%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call presented strong financial growth driven by key products, successful trial results, and significant investments in manufacturing. However, challenges remain with regulatory hurdles, potential tariff impacts, and market dynamics in the obesity segment. The balance of positive revenue growth and strategic investments against these challenges suggests a cautiously optimistic outlook.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Revenue grew 45% compared to Q1 of 2024, driven by key products like Mounjaro and Zepbound, which contributed over $4 billion in growth and accounted for $7.5 billion of the company's revenue.

Phase 3 Orforglipron Trial Success

Orforglipron achieved significant results in its Phase 3 trial for Type 2 diabetes, with hemoglobin A1c reductions of 1.3% to 1.6% and weight loss of approximately 16 pounds or 7.9% body weight at the highest dose.

Manufacturing Investment Expansion

Lilly announced over $50 billion in new U.S. manufacturing investments since 2020, including plans to build four new facilities, three of which will be active pharmaceutical ingredient facilities.

Strong Performance of Mounjaro and Zepbound

Mounjaro sales were $3.8 billion, more than double the same quarter last year, and Zepbound sales increased by $1.8 billion to $2.3 billion, making it the U.S. market leader in anti-obesity prescriptions.

Strong Financial Performance Metrics

Gross margin increased to 83.5% in Q1, and the non-GAAP performance margin was 42.6%, an increase of over 11 percentage points from Q1 2024.

Negative Updates

U.S. Regulatory Challenges for Heart Failure Indication

Lilly withdrew its U.S. application for heart failure with preserved ejection fraction indication for Tirzepatide due to FDA indicating the need for an additional confirmatory clinical trial.

Potential Impact of Trade Tariffs

While current tariffs do not materially change Lilly's 2025 financial outlook, expansion of tariffs in other geographies could negatively affect the company and the broader industry.

Price Declines in Key Markets

In the U.S., there was a 7% price decline, while in Europe, constant currency revenue growth was partially offset by a 7% decline in price.

CVS Formulary Change Concerns

CVS announced a formulary change favoring Wegovy over Zepbound, raising investor concerns about the impact on market share and pricing dynamics in the obesity market.

Company Guidance

During the Q1 2025 earnings call, Eli Lilly & Company reported a robust financial performance with a 45% increase in revenue compared to Q1 2024, driven by key products like Mounjaro, Zepbound, and Verzenio. The company's gross margin was 83.5%, with marketing expenses increasing by 26% and R&D expenses by 8%. Lilly achieved several pipeline milestones, including the approval of Omvoh in the U.S., EU, and Japan. They also announced significant U.S. manufacturing investments exceeding $50 billion since 2020. Despite the impact of acquired IPR&D charges reducing earnings per share by $1.72, the company delivered an EPS of $3.34. Looking ahead, Lilly anticipates further clinical trial readouts for orforglipron and potential regulatory submissions for obesity treatments by year-end 2025, while maintaining a focus on expanding their product pipeline and manufacturing capabilities.

Eli Lilly & Co Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Eli Lilly & Co Appoints Procter & Gamble CEO to Board

Neutral

Nov 19, 2024

Eli Lilly and Company announced the appointment of Jon Moeller, Chairman and CEO of Procter & Gamble, to its board of directors, effective December 1, 2024. Moeller brings extensive experience in leadership and strategic operations, complementing Lilly’s focus on innovation and growth. Concurrently, board member Karen Walker will resign at the end of 2024 but will continue collaborating with Lilly on digital initiatives in 2025. This transition marks a strategic evolution for Lilly as it enhances its digital and commercial capabilities.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.