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Comparative Study: Eli Lilly and Co And Industry Competitors In Pharmaceuticals Industry

Author: Benzinga Insights | May 03, 2024 11:00am

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Eli Lilly and Co (NYSE:LLY) in comparison to its major competitors within the Pharmaceuticals industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 111.33 56.07 19.01 19.02% $3.12 $7.09 25.98%
Novo Nordisk A/S 43.56 39.12 15.92 22.01% $28.51 $55.85 36.95%
AstraZeneca PLC 37.43 6.28 4.97 5.69% $4.47 $10.46 16.55%
Novartis AG 22.12 5.01 4.23 6.23% $4.66 $9.02 9.71%
GSK PLC 15.95 5.11 2.32 2.64% $2.07 $5.39 9.16%
Zoetis Inc 32.22 15.29 8.82 10.42% $0.83 $1.49 8.48%
Takeda Pharmaceutical Co Ltd 37.23 0.97 1.59 1.53% $314.89 $731.71 1.33%
Viatris Inc 232.20 0.68 0.91 -3.7% $-0.07 $1.6 -1.0%
Dr Reddy's Laboratories Ltd 19.93 3.88 3.83 5.29% $22.42 $42.2 6.57%
Jazz Pharmaceuticals PLC 22.63 1.86 1.97 2.61% $0.22 $0.81 4.1%
Corcept Therapeutics Inc 26.68 5.15 5.81 6.43% $0.03 $0.13 31.39%
Indivior PLC 449 243.15 2.26 940.0% $0.08 $0.24 12.25%
Average 85.36 29.68 4.78 90.83% $34.37 $78.08 12.32%

Through an analysis of Eli Lilly and Co, we can infer the following trends:

  • The Price to Earnings ratio of 111.33 for this company is 1.3x above the industry average, indicating a premium valuation associated with the stock.

  • The elevated Price to Book ratio of 56.07 relative to the industry average by 1.89x suggests company might be overvalued based on its book value.

  • The Price to Sales ratio of 19.01, which is 3.98x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • With a Return on Equity (ROE) of 19.02% that is 71.81% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

  • Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.12 Billion, which is 0.09x below the industry average, potentially indicating lower profitability or financial challenges.

  • With lower gross profit of $7.09 Billion, which indicates 0.09x below the industry average, the company may experience lower revenue after accounting for production costs.

  • The company's revenue growth of 25.98% exceeds the industry average of 12.32%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

debt to equity

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

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.

By considering the Debt-to-Equity ratio, Eli Lilly and Co can be compared to its top 4 peers, leading to the following observations:

  • Eli Lilly and Co holds a middle position in terms of the debt-to-equity ratio compared to its top 4 peers.

  • This indicates a balanced financial structure with a moderate level of debt and an appropriate reliance on equity financing with a debt-to-equity ratio of 2.05.

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. The low ROE, EBITDA, and gross profit suggest lower profitability and operational efficiency compared to industry peers. However, the high revenue growth rate may indicate strong potential for future growth and market expansion.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Posted In: LLY