NYSE:LLY

Stock Analysis Report

Executive Summary

Eli Lilly and Company discovers, develops, manufactures, and markets pharmaceutical products worldwide.

Rewards

Trading at 23.5% below its fair value

Earnings are forecast to grow 9.07% per year

Earnings grew by 43.5% over the past year

Pays a high and reliable dividend of 2.1%

Risk Analysis

High level of non-cash earnings

Has a high level of debt



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Eli Lilly's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LLY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.7%

LLY

-1.0%

US Pharmaceuticals

0.5%

US Market


1 Year Return

14.8%

LLY

6.7%

US Pharmaceuticals

20.3%

US Market

Return vs Industry: LLY exceeded the US Pharmaceuticals industry which returned 6.7% over the past year.

Return vs Market: LLY underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

LLYIndustryMarket
7 Day-0.7%-1.0%0.5%
30 Day-0.06%-3.3%2.0%
90 Day21.2%5.7%9.4%
1 Year17.3%14.8%9.4%6.7%22.8%20.3%
3 Year83.2%70.6%25.9%16.9%50.1%40.4%
5 Year127.6%101.1%21.3%9.0%73.1%54.1%

Price Volatility Vs. Market

How volatile is Eli Lilly's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Eli Lilly undervalued compared to its fair value and its price relative to the market?

23.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LLY ($140.83) is trading below our estimate of fair value ($183.99)

Significantly Below Fair Value: LLY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LLY is poor value based on its PE Ratio (28.4x) compared to the Pharmaceuticals industry average (21.5x).

PE vs Market: LLY is poor value based on its PE Ratio (28.4x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: LLY is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: LLY is overvalued based on its PB Ratio (37.9x) compared to the US Pharmaceuticals industry average (3.1x).


Next Steps

Future Growth

How is Eli Lilly forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LLY's forecast earnings growth (9.1% per year) is above the savings rate (1.7%).

Earnings vs Market: LLY's earnings (9.1% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: LLY's earnings are forecast to grow, but not significantly.

Revenue vs Market: LLY's revenue (5.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: LLY's revenue (5.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LLY's Return on Equity is forecast to be very high in 3 years time (100.8%).


Next Steps

Past Performance

How has Eli Lilly performed over the past 5 years?

7.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LLY has a high level of non-cash earnings.

Growing Profit Margin: LLY's current net profit margins (20.8%) are higher than last year (13.2%).


Past Earnings Growth Analysis

Earnings Trend: LLY's earnings have grown by 7.9% per year over the past 5 years.

Accelerating Growth: LLY's earnings growth over the past year (43.5%) exceeds its 5-year average (7.9% per year).

Earnings vs Industry: LLY earnings growth over the past year (43.5%) exceeded the Pharmaceuticals industry 2.4%.


Return on Equity

High ROE: Whilst LLY's Return on Equity (133.95%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Eli Lilly's financial position?


Financial Position Analysis

Short Term Liabilities: LLY's short term assets ($12.7B) exceed its short term liabilities ($10.8B).

Long Term Liabilities: LLY's short term assets ($12.7B) do not cover its long term liabilities ($23.6B).


Debt to Equity History and Analysis

Debt Level: LLY's debt to equity ratio (442.1%) is considered high.

Reducing Debt: LLY's debt to equity ratio has increased from 53.1% to 442.1% over the past 5 years.

Debt Coverage: LLY's debt is well covered by operating cash flow (28.2%).

Interest Coverage: LLY's interest payments on its debt are well covered by EBIT (18.1x coverage).


Balance Sheet

Inventory Level: LLY has a high level of physical assets or inventory.

Debt Coverage by Assets: LLY's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Eli Lilly's current dividend yield, its reliability and sustainability?

2.10%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: LLY's dividend (2.1%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: LLY's dividend (2.1%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: LLY's dividends per share have been stable in the past 10 years.

Growing Dividend: LLY's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.1%), LLY's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LLY's dividends in 3 years are forecast to be well covered by earnings (42.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Dave Ricks (51yo)

3.1yrs

Tenure

US$17,230,337

Compensation

Mr. David A. Ricks, also known as Dave, served as a Director of Elanco Animal Health Incorporated until March 2019. He has been the Chief Executive Officer and President of Eli Lilly and Company since Janu ...


CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD17.23M) is above average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Dave's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
David Ricks
Chairman3.1yrsUS$17.23m0.029% $36.5m
Joshua Smiley
Senior VP & CFO2.1yrsUS$5.25m0.0041% $5.2m
Daniel Skovronsky
Senior VP1.7yrsUS$5.15m0.010% $12.9m
Jeffrey Simmons
Senior VP & President of Elanco Animal Health12.1yrsUS$5.38m0.019% $23.9m
Jacob Van Naarden
Chief Operating Officer of Loxo Oncology0yrsno datano data
Donald Zakrowski
Chief Accounting Officer & VP of Finance7.3yrsno data0.0011% $1.4m
Martin Bott
Vice President of Finance & Special Projects3.1yrsno datano data
Aarti Shah
Senior VP of Information Technology & Chief Information and Digital Officer3.6yrsno data0.0024% $3.0m
Kevin Hern
Vice President of Investor Relations0yrsno datano data
Melissa Barnes
Senior VP of Enterprise Risk Management and Chief Ethics & Compliance Officer7.1yrsno data0.0031% $3.9m

3.3yrs

Average Tenure

51yo

Average Age

Experienced Management: LLY's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Ricks
Chairman3.1yrsUS$17.23m0.029% $36.5m
Michael Eskew
Independent Director12yrsUS$315.00kno data
Kathi Seifert
Independent Director25.1yrsUS$294.00k0.00037% $472.3k
Sidney Taurel
Chairman Emeritus11.1yrsUS$13.06mno data
J. Fyrwald
Independent Director14.3yrsUS$298.00k0.000010% $12.8k
Ralph Alvarez
Independent Director10.8yrsUS$306.00kno data
William Kaelin
Independent Director7.7yrsUS$309.00kno data
Juan Luciano
Lead Independent Director0.8yrsUS$299.00kno data
Katherine Baicker
Independent Director8.2yrsUS$302.00kno data
Jamere Jackson
Independent Director3.3yrsUS$294.00kno data

9.5yrs

Average Tenure

60.5yo

Average Age

Experienced Board: LLY's board of directors are considered experienced (9.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Eli Lilly and Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Eli Lilly and Company
  • Ticker: LLY
  • Exchange: NYSE
  • Founded: 1876
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: US$127.646b
  • Shares outstanding: 906.38m
  • Website: https://www.lilly.com

Number of Employees


Location

  • Eli Lilly and Company
  • Lilly Corporate Center
  • Indianapolis
  • Indiana
  • 46285
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LLYNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
LLYSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1969
LLY *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1969
0Q1GLSE (London Stock Exchange)YesCommon StockGBCHFJan 1969
LLYDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969
LLYXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1969
LLYZBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBCHFJan 1969
LLYETLX (Eurotlx)YesCommon StockITEURJan 1969
LLYCWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1969
LLYBASE (Buenos Aires Stock Exchange)CEDEAR EACH 4 REPR 1 ORD NPVARARSJul 2001
LILY34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 0.5 COM NPVBRBRLAug 2012

Biography

Eli Lilly and Company discovers, develops, manufactures, and markets pharmaceutical products worldwide. The company operates in two segments, Human Pharmaceutical Products and Animal Health Products. It offers endocrinology products for diabetes; osteoporosis in postmenopausal women and men; and human growth hormone deficiency and paediatric growth conditions. The company also provides neuroscience products for treating depressive disorder, diabetic peripheral neuropathic pain, anxiety disorder, fibromyalgia, and chronic musculoskeletal pain; schizophrenia; attention-deficit hyperactivity disorder; obsessive-compulsive disorder, bulimia nervosa, and panic disorder; and positron emission tomography imaging of beta-amyloid neurotic plaques in adult brains, as well as migraine prevention. In addition, it offers immunology products for the treatment of rheumatoid arthritis and plaque psoriasis; oncology products to treat non-small cell lung, colorectal, head and neck, pancreatic, metastatic breast, ovarian, bladder, and metastatic gastric cancers, as well as malignant pleural mesothelioma; and cardiovascular products to treat erectile dysfunction and benign prostatic hyperplasia, and acute coronary syndrome. Further, the company provides animal health products, such as cattle feed additives; leanness and performance enhancers for swine and cattle; antibiotics to treat respiratory and enteric diseases in swine and poultry; anticoccidial agents for poultry use; and chewable tablets that kill fleas and prevent heartworm diseases. Additionally, it offers vaccines to prevent Bordetella, Lyme disease, rabies, and parvovirus. The company has collaboration with Daiichi Sankyo Co., Ltd.; Incyte Corporation; Pfizer Inc.; AstraZeneca; Nektar Therapeutics; NextCure, Inc.; Dicerna Pharmaceuticals; AC Immune SA; Avidity Biosciences, Inc.; Strateos Inc.; and National Comprehensive Cancer Network. Eli Lilly and Company was founded in 1876 and is headquartered in Indianapolis, Indiana. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:39
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.