Eli Lilly & Company’s (LLY) new drug line-up is expected to generate higher revenue and earnings. In addition, LLY’s strong earnings, favorable analyst estimates and industry-high profitability make it a promising investment option. read on….
Eli Lilly & Company (LLY) is engaged in exploring, developing, manufacturing, marketing and selling pharmaceutical products worldwide. Its subsidiaries include Acanthas Pharma, Inc., Alnara Pharmaceuticals, Inc., ARMO Biosciences, Inc., and Avid Radiopharmaceuticals, Inc. Are included.
On May 13, 2022, LLY announced that the US Food and Drug Administration (FDA) has approved Monjaro (tirazeptide) Injection. Mike Mason, President of LLY, said, “We are thrilled to introduce Mounjaro, which represents the first new class of type 2 diabetes medication introduced in nearly a decade and our mission to bring innovative new therapies to the diabetes community. a symbol of.”
In June 2021, LLY was granted the breakthrough therapy designation for donemab, an investigational antibody therapy for Alzheimer’s. LLY and Incyte Corporation on 13 June 2022 (INCY) announced the approval of OLUMIANT (baricitinib) as the first systemic treatment in the disease for adults with severe alopecia.
These new drugs are expected to generate revenue and earnings for the company. Also, monjaro was found to be effective in helping people lose weight. This is expected to open up a new revenue stream for LLY, provided it receives FDA approval as a potential weight loss treatment.
LLY’s share price is up 11% year-on-year and 38.5% over the previous year and closed the previous trading session at $306.69.
Here’s what could impact LLY’s performance in the coming months:
LLY’s revenue for the first quarter ended March 31, 2022 increased 14.7% year-over-year to $7.81 billion. The company’s non-GAAP net income increased 61.9% year-over-year to $2.37 billion. In addition, its non-GAAP EPS came in at $2.62, representing an increase of 62.7% year-over-year.
favorable analyst estimates
Analysts expect LLY’s revenue to grow 7.6% and 4.8% year-over-year to $27.58 billion and $28.91 billion for fiscal years 2022 and 2023, respectively, while its EPS for fiscals 2022 and 2023 will grow 6.6% and more. Expected to grow 14.3% year-over-year. $7.88 and $9.01, respectively, over the years.
In terms of 12-month gross profit margin, LLY’s 75.56 per cent is 37.2% higher than the industry average of 55.04 per cent. Similarly, its 0.63% trailing-12-month asset turnover ratio 77.6% higher than the industry average of 0.35%. Plus, its trailing-12-month EBIT margin of 30.99% is 3,053.9% higher than the 0.98% industry average.
In addition, the stock’s previous-12-month ROCE, ROTC, and ROA came in negative at 75.53%, 22.99%, and 13.06% compared to the industry averages.
Power Rating Show Promise
LLY has an overall rating of B, which is the equivalent of a buy in our POWR rating system. power rating Calculations are made taking into account 118 different factors, weighting each factor to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight different categories. LLY has a B grade for quality with its trailing-12-month EBITDA margin of 36.56%, which is 827.1% higher than the 3.94% industry average.
It has a B grade for stability, which corresponds to its 0.40 beta.
The approval of LLY’s new drug for type 2 diabetes and severe alopecia areata is expected to increase revenue and earnings for the company. Given its strong financial position, favorable analyst estimates and higher profitability than the industry, the investment case also makes a strong case for it. Hence, we feel that it may be prudent to include this stock in your portfolio.
How Eli Lilly & Company (LLY) Does Stack up against your teammates?
LLY has an overall POWR rating of B, which is equivalent to a Buy rating. You may consider investing in the following medical – pharmaceuticals stocks with an A (strong buy) or B (buy) rating: Merck & Co., Inc. ,MRK), Novartis AG (NVS), Zoetis Inc. ,ZTS,
Shares of LLY fell $0.86 (-0.28%) in premarket trading on Thursday. Year-on-year, LLY has gained 11.56%, while the benchmark S&P 500 index has gained -20.25% during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This earned him a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a keen interest in reading and analyzing emerging trends in the financial markets.
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