Stock of the Day

December 2, 2022

Eli Lilly and Company (LLY)

$874.12
+$1.00 (+0.1%)
Market Cap: $827.87B

About Eli Lilly and Company

Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity. It also provides oncology products, including Alimta, Cyramza, Erbitux, Jaypirca, Retevmo, Tyvyt, and Verzenio. In addition, the company offers Olumiant for rheumatoid arthritis, atopic dermatitis, severe alopecia areata, and COVID-19; Taltz for plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondylarthritis; Omvoh for ulcerative colitis; Cymbalta for depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, fibromyalgia, and chronic musculoskeletal pain; Ebglyss for severe atopic dermatitis; and Emgality for migraine prevention and episodic cluster headache. Further, it provides Cialis for erectile dysfunction and benign prostatic hyperplasia; and Forteo for osteoporosis. It has collaborations with Incyte Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; F. Hoffmann-La Roche Ltd and Genentech, Inc.; Biologics, Inc., AbCellera Biologics Inc.; and Chugai Pharmaceutical Co., Ltd. The company was founded in 1876 and is headquartered in Indianapolis, Indiana.

Eli Lilly and Company Bull Case

Here are some ways that investors could benefit from investing in Eli Lilly and Co:

  • The company recently increased its quarterly dividend from $1.30 to $1.50 per share, reflecting a commitment to returning value to shareholders. This increase represents an annualized dividend of $6.00, providing a yield of 0.71%, which can be attractive for income-focused investors.
  • Eli Lilly and Co has initiated a substantial stock buyback program, authorizing the repurchase of up to $15.00 billion in shares. This move often indicates that the company's management believes its stock is undervalued, potentially leading to an increase in share price as the supply of shares decreases.
  • The company has demonstrated strong financial performance, with a return on equity of 86.26% and a net margin of 23.51%. These metrics suggest efficient management and profitability, which can be appealing to investors looking for financially sound companies.
  • Analysts have a consensus rating of "Moderate Buy" for Eli Lilly and Co, with a price target of $997.50. This positive outlook from analysts can instill confidence in potential investors regarding the stock's future performance.
  • As of now, the stock price is around $794.44, which is significantly below its one-year high of $972.53. This price point may present a buying opportunity for investors looking to capitalize on potential future growth.

Eli Lilly and Company Bear Case

Investors should be bearish about investing in Eli Lilly and Co for these reasons:

  • The company reported earnings per share (EPS) of $5.32 for the last quarter, missing the consensus estimate of $5.45 by $0.13. This shortfall may raise concerns about the company's ability to meet future earnings expectations.
  • Eli Lilly and Co has a relatively high P/E ratio of 72.15, which may indicate that the stock is overvalued compared to its earnings. High valuations can lead to increased volatility and risk for investors.
  • The debt-to-equity ratio stands at 2.03, suggesting that the company is heavily leveraged. High levels of debt can pose risks, especially in economic downturns, as it may limit financial flexibility.
  • Despite the positive outlook from analysts, there are four analysts who have rated the stock with a hold rating, indicating some caution among market experts regarding the stock's performance.
  • The stock has a beta of 0.42, which indicates lower volatility compared to the market. While this can be seen as a safety feature, it may also limit potential gains during bullish market conditions.

Four Healthcare Stocks To Watch This Week

Written By Keala Milles on 11/16/2022

Four Healthcare Stocks To Watch This Week

Healthcare has long been a pretty wise investment, as the industry consistently grows every year. As a matter of fact, some analysts believe this economic sector could grow by more than 7% through 2027. That is nearly double the expectation for overall economic growth over the same period. In addition healthcare spending in the United States accounts for almost 20% of the Gross Domestic Product (2020), even US patients pay more for health care than any other comparably advanced global economy.

For these reasons and more, healthcare stocks are often wise to include in any investment portfolio. But while the numbers are promising, investing in healthcare stocks is not the same simple matter. Accordingly, here are four healthcare stocks worth watching right now, two of which might make smart buys.

United Health Group is a Moderate Buy

The only company on this list to offer insurance options in addition to healthcare products is United Health Group (NYSE: UNH). With a current share value of, UNH is up more than 2.3% on the year so far; however, some other factors contribute to make UNH a Moderate BUY this week.

For one, they have an impressive upside of 15.80% with at least 13% earnings growth. This suggests that not only do analysts foresee the company growing profit, but the expected earnings to grow parallel. United Healthgroup has a similarly impressive Price-to-Sales ratio (P/S) of 1.67—with a nearly unheard-of Price-to-Earnings ratio (P/E) of 25.16—making UNH a perfect example of these two metrics. And with a beta of 0.75, they are 25% less volatile than the S&P 500.

Eli Lilly & Co is also a Moderate BUY

After a monumental decline this week, Eli Lilly & Co (NYSE: LLY) is certainly one healthcare stock to watch, if not BUY. A fake Eli Lilly Twitter account claimed the company would make insulin free of charge, resulting in the pharmaceutical company pulling several million dollars in marketing from Twitter. More importantly, the fiasco plunged LLY share price, even as the company attempted to minimize the obvious blowback such a statement would generate.

Fortunately, the company managed to slow the effects and should be ready for a rebound. After all, before this little mishap, the stock was already up more than 25% on the year. More importantly, of course, since the media triage, Eli Lilly is back up to the top 10% of the stock's entire 52-week range, at a share price of $356.06. While the stock is still expected to slip—LLY has a new price target of $346.82 by the next reporting date—analysts project almost 19% earnings growth. And with a beta value of 0.36, LLY could prove fruitful when its recovery from the Twitter incident hit full swing.

Johnson & Johnson is a HOLD

Sitting near the median of its 52-week range, Johnson & Johnson (NYSE: JNJ) has a current share price of $171.91. This is barely up on the year, at all; only 0.77% year-to-date. The growth may not be immediately noticeable, but a net margin approaching 20%—and 35% Return-on-Equity (RoE)—certainly help make the stock more attractive. A 0.57 beta value, might also make the stock more encouraging.

Unfortunately, this may not be the best time to make any more on JNH. While analysts expect a decent +7.20% upside, for example, a concernedly high dividend payout ratio of 62.95%, could cast a pall over any strong hope for quality growth. Johnson & Johnson expects to publish their next earnings report in late January of 2023. For now, then, analysts suggest you simply Hold on JNJ, at least until then.

Pfizer Inc. is also a HOLD

Among these healthcare stocks, Pfizer Inc.'s current rating may be the biggest surprise. For one, Pfizer, Inc. (NYSE: PFE) is down around -17% on the year and analysts project their earnings could fall as much as -24% in the next 12 months. A current P/E of 9.47—more than half that of JNJ and nearly one-third of UNH—is remarkably lower than they would have liked.

Fortunately, Pfizer is in a convenient position as Moderna's stock (NASDAQ: MRNA) recently surged on positive news regarding their new COVID-19 booster. MRNA's jump helped shore up other similar properties, including PFE, working to improve Covid-related care. Pfizer, of course, has their own Covid booster in the works.

Based solely on the numbers, a HOLD rating makes a lot of sense for Pfizer, today. They are certainly not in the worst position but expectations are low in the short term. However, their current path is not exactly a straight-and-narrow path to the top.

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