In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Eli Lilly and Co (NYSE:LLY) in relation to its major competitors in the Pharmaceuticals industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Eli Lilly and Co | 133.88 | 63.88 | 22.86 | 19.02% | $3.12 | $7.09 | 25.98% |
| Novo Nordisk A/S | 50.55 | 45.32 | 18.48 | 24.73% | $36.91 | $55.43 | 22.45% |
| Johnson & Johnson | 21.66 | 5.01 | 4.28 | 4.69% | $5.68 | $14.87 | 2.34% |
| Merck & Co Inc | 144.24 | 8.15 | 5.38 | 12.22% | $6.96 | $12.23 | 8.89% |
| AstraZeneca PLC | 38.61 | 6.47 | 5.13 | 5.69% | $4.47 | $10.46 | 16.55% |
| Novartis AG | 24.22 | 5.48 | 4.63 | 6.23% | $4.66 | $9.02 | 9.71% |
| Zoetis Inc | 34 | 15.92 | 9.31 | 11.91% | $0.93 | $1.55 | 9.5% |
| GSK PLC | 14 | 4.49 | 2.04 | 7.69% | $2.07 | $5.39 | 5.93% |
| Takeda Pharmaceutical Co Ltd | 45.23 | 0.89 | 1.53 | -0.04% | $86.09 | $668.37 | 9.91% |
| Dr Reddy's Laboratories Ltd | 18.83 | 3.73 | 3.76 | 4.77% | $20.32 | $41.48 | 12.49% |
| Jazz Pharmaceuticals PLC | 22.17 | 1.83 | 1.93 | -0.39% | $0.23 | $0.81 | 1.03% |
| Prestige Consumer Healthcare Inc | 16.70 | 2.10 | 3.10 | 3.04% | $0.09 | $0.15 | -3.11% |
| Corcept Therapeutics Inc | 30.53 | 6.09 | 6.76 | 5.22% | $0.03 | $0.14 | 38.95% |
| Average | 38.4 | 8.79 | 5.53 | 7.15% | $14.04 | $68.33 | 11.22% |
By closely examining Eli Lilly and Co, we can identify the following trends:
The current Price to Earnings ratio of 133.88 is 3.49x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
The elevated Price to Book ratio of 63.88 relative to the industry average by 7.27x suggests company might be overvalued based on its book value.
With a relatively high Price to Sales ratio of 22.86, which is 4.13x the industry average, the stock might be considered overvalued based on sales performance.
The Return on Equity (ROE) of 19.02% is 11.87% above the industry average, highlighting efficient use of equity to generate profits.
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.12 Billion, which is 0.22x below the industry average, the company may face lower profitability or financial challenges.
With lower gross profit of $7.09 Billion, which indicates 0.1x below the industry average, the company may experience lower revenue after accounting for production costs.
With a revenue growth of 25.98%, which surpasses the industry average of 11.22%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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 evaluating Eli Lilly and Co alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
Eli Lilly and Co has a higher debt-to-equity ratio of 2.05 compared to its top 4 peers.
This indicates a higher level of financial risk as the company relies more heavily on borrowed funds. Investors may perceive this 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.
This article was generated by Benzinga's automated content engine and reviewed by an editor.