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In-Depth Analysis: Eli Lilly and Co Versus Competitors In Pharmaceuticals Industry

Author: Benzinga Insights | July 12, 2024 11:00am

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Eli Lilly and Co (NYSE:LLY) against its key competitors in the Pharmaceuticals industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within 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 137.58 65.65 23.49 19.02% $3.12 $7.09 25.98%
Novo Nordisk A/S 48.43 43.42 17.70 24.73% $36.91 $55.43 22.45%
Johnson & Johnson 22.24 5.15 4.40 4.69% $5.68 $14.87 2.34%
Merck & Co Inc 143.30 8.09 5.35 12.22% $6.96 $12.23 8.89%
AstraZeneca PLC 38.49 6.45 5.11 5.69% $4.47 $10.46 16.55%
Novartis AG 25.11 5.68 4.81 6.23% $4.66 $9.02 9.71%
Zoetis Inc 34.25 16.03 9.38 11.91% $0.93 $1.55 9.5%
GSK PLC 13.98 4.48 2.04 7.69% $2.07 $5.39 5.93%
Takeda Pharmaceutical Co Ltd 47.43 0.94 1.60 -0.04% $86.09 $668.37 9.91%
Dr Reddy's Laboratories Ltd 19.68 3.90 3.93 4.77% $20.32 $41.48 12.49%
Jazz Pharmaceuticals PLC 21.96 1.81 1.91 -0.39% $0.23 $0.81 1.03%
Prestige Consumer Healthcare Inc 16.84 2.11 3.13 3.04% $0.09 $0.15 -3.11%
Corcept Therapeutics Inc 29.69 5.92 6.57 5.22% $0.03 $0.14 38.95%
Average 38.45 8.67 5.49 7.15% $14.04 $68.33 11.22%

By carefully studying Eli Lilly and Co, we can deduce the following trends:

  • Notably, the current Price to Earnings ratio for this stock, 137.58, is 3.58x above the industry norm, reflecting a higher valuation relative to the industry.

  • With a Price to Book ratio of 65.65, which is 7.57x the industry average, Eli Lilly and Co might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

  • The stock's relatively high Price to Sales ratio of 23.49, surpassing the industry average by 4.28x, may indicate an aspect of overvaluation in terms of sales performance.

  • The company has a higher Return on Equity (ROE) of 19.02%, which is 11.87% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

  • Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.12 Billion, which is 0.22x below the industry average, potentially indicating 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.

  • The company's revenue growth of 25.98% is notably higher compared to the industry average of 11.22%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

debt to equity

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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:

  • Among its top 4 peers, Eli Lilly and Co has a higher debt-to-equity ratio of 2.05.

  • This suggests a greater reliance on debt financing, which can expose the company to increased financial risk and potential volatility.

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.

Posted In: LLY

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