ELI LILLY & Co (NYSE: LLY)

Sector: Healthcare Industry: Drug Manufacturers - General CIK: 0000059478
Market Cap 940.24 Bn
P/B 59.64
P/E 84.66
P/S 19.19
ROIC (Qtr) 27.91
Div Yield % 0.66
Rev 1y % (Qtr) 53.87
Total Debt (Qtr) 42.51 Bn
Debt/Equity (Qtr) 1.79

About

Eli Lilly and Company, commonly referred to as Lilly, is a prominent player in the pharmaceutical industry, operating under the ticker symbol LLY. The company's operations are centered on the discovery, development, manufacturing, and marketing of human pharmaceutical products, with a global footprint spanning approximately 105 countries. Lilly's primary business activities revolve around the development and commercialization of innovative medicines that target significant unmet medical needs. The company's product portfolio is diverse, encompassing...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 9.79B provide 6x coverage of short-term debt 1.63B, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 16.06B provides strong 25.42x coverage of stock compensation 631.80M, indicating sustainable incentive practices.
  • Strong operating cash flow of 16.06B provides 1.55x coverage of SG&A expenses 10.39B, showing efficient operational cost management.
  • Robust tangible asset base of 102.59B provides 4.68x coverage of working capital 21.93B, indicating strong operational backing.
  • Operating cash flow of 16.06B fully covers other non-current liabilities 10.07B by 1.60x, showing strong long-term stability.

Bear case

  • Operating cash flow of 16.06B barely covers its investment activities of (10.09B), with a coverage ratio of -1.59, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (10.09B) provide weak support for R&D spending of 12.56B, which is -0.80x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 16.06B provides thin coverage of dividend payments of (5.21B) with a -3.08 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 9.79B provide limited coverage of acquisition spending of (549.40M), which is -17.82x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Retained earnings of 22.25B provide limited buffer against comprehensive income items of (3.21B), which is -6.94x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Drug Manufacturers - General
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LLY ELI LILLY & Co 940.24 Bn 84.66 19.19 42.51 Bn
2 JNJ Johnson & Johnson 656.09 Bn 49.20 10.65 45.80 Bn
3 AMGN Amgen Inc 389.67 Bn 89.91 26.60 54.59 Bn
4 ABBV AbbVie Inc. 363.54 Bn 129.05 16.59 68.74 Bn
5 MRK Merck & Co., Inc. 320.49 Bn 202.84 7.87 41.37 Bn
6 NVS Novartis Ag 304.60 Bn 21.78 5.37 35.46 Bn
7 AZN Astrazeneca Plc 291.12 Bn 30.97 5.01 32.63 Bn
8 NVO Novo Nordisk A S 219.30 Bn 13.62 4.51 20.59 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 8.44 2.39
EV to Cash from Ops. EV/CFO 104.17 27.43
EV to Debt EV to Debt 22.83 6.41
EV to EBIT EV/EBIT 71.37 29.56
EV to EBITDA EV/EBITDA 62.91 21.95
EV to Free Cash Flow [EV/FCF] EV/FCF 259.77 39.77
EV to Market Cap EV to Market Cap 1.03 1.28
EV to Revenue EV/Rev 19.81 7.09
Price to Book Value [P/B] P/B 59.64 12.10
Price to Earnings [P/E] P/E 84.66 73.51
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.54 0.92
Dividend Payout Ratio % Div Payout % (Qtr) 28.30 65.92
Dividend per Basic Share Div per Share (Qtr) 5.80 2.81
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 56.10 37.42
Interest Coverage Interest Coverage 0.00 20.26
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -46.58 -9.54
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 190.65 96.72
Dividend Growth (1y) % Div 1y % (Qtr) 15.31 2.18
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 119.98 74.22
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 106.43 29.18
EBIT Growth (1y) % EBIT 1y % (Qtr) 121.70 66.23
EBT Growth (1y) % EBT 1y % (Qtr) 121.70 310.53
EPS Growth (1y) % EPS 1y % (Qtr) 120.56 352.41
FCF Growth (1y) % FCF 1y % (Qtr) 562.37 47.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 49.23 8.06
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.52 0.38
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.27
Cash Ratio Cash Ratio (Qtr) 0.24 2.11
Current Ratio Curr Ratio (Qtr) 1.55 6.17
Debt to Equity Ratio Debt/Equity (Qtr) 1.79 -0.40
Interest Cover Ratio Interest Cover Ratio 0.00 20.26
Times Interest Earned Times Interest Earned 0.00 20.26
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 41.10 -13.61
EBIT Margin % EBIT Margin % (Qtr) 37.87 -10.56
EBT Margin % EBT Margin % (Qtr) 37.87 -25.71
Gross Margin % Gross Margin % (Qtr) 83.00 64.91
Net Profit Margin % Net Margin % (Qtr) 31.00 -34.99