Should You Buy Eli Lilly Stock At $820? | U.S. Markets

Should You Buy Eli Lilly Stock At $820? | U.S. Finance News

Eli Lilly stock (NYSE: LLY) stock is exhibiting optimistic momentum on Thursday, April seventeenth, following the company’s announcement of profitable outcomes from the primary of its late-stage trials for a every day weight problems tablet. The trial met its major objectives, demonstrating the tablet’s effectiveness in serving to sufferers with Type 2 diabetes obtain decrease blood sugar ranges and decreased physique weight. Notably, the tablet additionally exhibited a security profile similar to well-liked injectable drugs at the moment on the market, similar to Novo Nordisk’s Ozempic.
This development is a vital optimistic for Eli Lilly. The comfort of a every day tablet, versus an injection like Ozempic, may offer a appreciable benefit if the remedy receives regulatory approval, doubtlessly giving it an edge over its rival Novo Nordisk.

Given this optimistic news and the following stock rise, the query is whether or not Eli Lilly is a buy at round $820. Our evaluation suggests it’s. We have reached this conclusion by evaluating Eli Lilly’s present valuation with its latest working efficiency, in addition to its current and historic financial situation. Our evaluation, which considers key components similar to Growth, Profitability, Financial Stability, and Downturn Resilience, signifies that Eli Lilly possesses a very robust working efficiency and sturdy financial situation, as will probably be elaborated upon under.
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How Does Eli Lilly’s Valuation Look vs. The S&P 500?
Going by what you pay per greenback of gross sales or revenue, LLY stock appears to be like very costly in comparison with the broader market.

Eli Lilly and has a price-to-sales (P/S) ratio of 16.6 vs. a determine of 2.8 for the S&P 500

It trades at a price-to-earnings (P/E) ratio of 70 vs. a determine of 22 for the benchmark S&P 500

 
How Have Eli Lilly’s Revenues Grown Over Recent Years?
Eli Lilly’s Revenues have grown significantly over latest years.

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Eli Lilly has seen its high line grow at an average price of 17.4% over the past 3 years (vs. increase of 6.2% for S&P 500)

Its revenues have grown 32.0% from $34 Bil to $45 Bil within the final 12 months (vs. growth of 5.3% for S&P 500)

Also, its quarterly revenues grew 44.7% to $14 Bil in the newest quarter from $9.4 Bil a 12 months in the past (vs. 4.9% enchancment for S&P 500)

How Profitable Is Eli Lilly?
Eli Lilly’s revenue margins are a lot larger than most firms within the Trefis protection universe.

Eli Lilly’s Operating Income over the past 4 quarters was $18 Bil, which represents a significantly high Operating Margin of 38.9% (vs. 13.1% for S&P 500)

 
Does Eli Lilly Look Financially Stable?
Eli Lilly’s stability sheet appears to be like robust.

Eli Lilly’s Debt determine was $34 Bil on the finish of the newest quarter, whereas its market capitalization is $661 Bil (as of 4/16/2025). This implies a very robust Debt-to-Equity Ratio of 4.9% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]

Cash (together with money equivalents) makes up $3.4 Bil of the $79 Bil in Total Assets for Eli Lilly.  This yields a poor Cash-to-Assets Ratio of 4.3% (vs. 15.0% for S&P 500)

 
How Resilient Is LLY Stock During A Downturn?
LLY stock has been more resilient than the benchmark S&P 500 index during some of the latest downturns. Worried in regards to the impression of a market crash on LLY stock? Our dashboard How Low Can Eli Lilly and Stock Go In A Market Crash? has a detailed evaluation of how the stock carried out during and after earlier market crashes.

Inflation Shock (2022)

LLY stock fell 15.0% from a high of $276.22 on 1 January 2022 to $234.69 on 14 February 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500

The stock totally recovered to its pre-Crisis peak by 16 March 2022

Since then, the stock has elevated to a high of $960.02 on 2 September 2024 and at the moment trades at round $730

 
Covid Pandemic (2020)

LLY stock fell 19.2% from a high of $147.35 on 5 February 2020 to $119.05 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500

The stock totally recovered to its pre-Crisis peak by 14 April 2020

 
Global Financial Crisis (2008)

LLY stock fell 54.6% from a high of $60.56 on 20 April 2007 to $27.47 on 5 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500

The stock totally recovered to its pre-Crisis peak by 21 April 2014

 
Putting All The Pieces Together: What It Means For LLY Stock
In abstract, Eli Lilly and’s efficiency throughout the parameters detailed above are as follows:

Growth: Extremely Strong

Profitability: Very Strong

Financial Stability: Strong

Downturn Resilience: Strong

Overall: Very Strong

Eli Lilly has demonstrated very robust efficiency throughout key metrics. While its valuation a number of could seem elevated, this appears justified by the company’s sturdy growth prospects and promising drug pipeline. With the demand for weight problems therapies quickly growing, Eli Lilly has emerged as a main participant alongside Novo Nordisk. Furthermore, the potential approval of Eli Lilly’s handy every day tablet for Type 2 diabetes may give it a vital benefit within the increasing diabetes and weight problems drug market. Overall, even after the stock’s rally at present, we keep our view that LLY stock is a robust buy. Notably, the average analyst price goal of $1008 nonetheless suggests an upside of over 20% from the present ranges.

Systematic Strategies & Rules-Based Wealth Management
Trefis runs systematic portfolio methods that incorporate risk control by a mixture of high-quality picks and energetic hedges. We’ve partnered with Empirical Asset Management, a rules-based wealth supervisor, to make these methods out there to buyers. If you’re occupied with studying more about Trefis methods or Empirical try this hyperlink.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.

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