Lilly (Eli) stock investment attractiveness analytics in 2025

Stock market information for Lilly(Eli) & Co (LLY)

• Lilly(Eli) & Co is a equity in the USA market.
• The price is 767.16 USD currently with a change of -4.55 USD (-0.01%) from the previous close.
• The latest open price was 768.17 USD and the intraday volume is 1810347.
• The intraday high is 775.0 USD and the intraday low is 760.77 USD.
• The latest trade time is Monday, July 21, 10:57:34 PDT.

Executive Summary

Conclusion: Eli Lilly and Company (Lilly) is well-positioned for substantial growth over the next five years, driven by its strong product pipeline, particularly in the obesity and diabetes sectors, and strategic global expansion plans.

Recommendation: Buy

• Robust Financial Performance: Lilly reported a 32% increase in revenue to $45.04 billion in 2024, with net income surging 102% to $10.59 billion, indicating strong operational efficiency and market demand. (news.futunn.com)

• Innovative Product Pipeline: The company’s focus on groundbreaking treatments, such as the weight-loss drug Zepbound and the diabetes medication Mounjaro, positions it favorably in high-growth therapeutic areas. (reuters.com)

• Strategic Global Expansion: Plans to launch key products in emerging markets like China, India, Brazil, and Mexico are expected to significantly broaden Lilly’s customer base and revenue streams. (reuters.com)

1. Investment Mandate & Positioning

1.1 Target IRR and Drawdown Tolerance:

• Target Internal Rate of Return (IRR): 12%–15% per annum over the next five years.

• Maximum Drawdown Tolerance: -20%, aligning with typical equity investment risk profiles.

1.2 Position-Sizing and Correlation:

• Position-Sizing Range: 5%–7% of the portfolio, considering Lilly’s market capitalization and growth prospects.

• Correlation Assessment: Lilly’s stock exhibits moderate correlation with the broader healthcare sector, providing diversification benefits within an equity portfolio.

2. Core Document & Data Gathering

2.1 Regulatory Filings:

• Annual Report (10-K): Comprehensive financial and operational data for 2024. (news.futunn.com)

• Quarterly Reports (10-Q): Detailed quarterly performance metrics.

• Proxy Statement (DEF 14A): Information on corporate governance and executive compensation.

• Current Reports (8-K): Updates on material events affecting the company.

2.2 Investor Materials:

• Investor Day Presentations: Insights into strategic initiatives and future outlook.

• Earnings Call Transcripts: Management’s discussion on financial results and business developments.

2.3 Third-Party Research:

• Sell-Side Analyst Reports: Analyses from investment banks and financial institutions.

• Independent Research: Evaluations from independent research firms.

• Newswire Highlights: Recent news articles and press releases.

3. Qualitative Business Analysis

3.1 Business Model & Strategy:

• Core Products/Services: Lilly specializes in pharmaceuticals, with key products including Mounjaro for diabetes and Zepbound for weight loss.

• Revenue Streams: Primarily derived from pharmaceutical sales across various therapeutic areas.

• Geographic Footprint: Operations in approximately 95 countries, with significant revenue from the U.S. and expanding presence in emerging markets.

3.2 Growth Drivers & Total Addressable Market (TAM):

• Obesity and Diabetes Treatments: The global obesity market is projected to reach $150 billion by the early 2030s, presenting substantial growth opportunities for Lilly’s products. (reuters.com)

• Emerging Markets Expansion: Entry into high-population countries with rising healthcare needs.

3.3 Competitive Moat:

• Patents: Strong intellectual property portfolio protecting key products.

• Regulatory Barriers: Established compliance and regulatory expertise facilitating market entry.

3.4 Management Quality & Governance Deep Dive:

• CEO/CFO Track Records: CEO David A. Ricks has led strategic initiatives resulting in significant growth.

• Insider Ownership: Management holds a meaningful stake, aligning interests with shareholders.

• Board Composition: Diverse board with relevant industry experience.

• Governance Policies: Strong policies ensuring accountability and ethical conduct.

4. Financial Health & Stability

4.1 Balance-Sheet Analysis:

• Debt-to-Equity Ratio: Increased to $29.47 billion in 2024, reflecting strategic acquisitions and investments. (secsense.ai)

• Current Ratio: Indicates adequate short-term liquidity.

• Cash Reserves: Sufficient to support ongoing operations and strategic initiatives.

4.2 Profitability & Cash Flow:

• Revenue Growth: 32% increase to $45.04 billion in 2024.

• Gross Margin: Improved to 81.3% from 79.2% in 2023.

• Net Income: Surged 102% to $10.59 billion.

• Free Cash Flow Trends: Positive, supporting dividends and share repurchases.

4.3 Key Ratios:

• Return on Equity (ROE): Indicates efficient use of equity capital.

• Return on Invested Capital (ROIC): Reflects effective capital allocation.

• Margin Ratios: Consistent with industry peers, with potential for expansion.

5. Historical & Projected Financials

5.1 Trend Analysis:

• Past 5 Years: Consistent revenue and earnings growth, driven by successful product launches and market expansion.

5.2 Forecast Model:

• Bear Case: Slower-than-expected market adoption and competitive pressures.

• Base Case: Continued growth in core markets and successful new product launches.

• Bull Case: Accelerated market penetration and favorable regulatory developments.

6. Valuation & Total-Return Scenarios

6.1 Discounted Cash Flow (DCF) Analysis:

• Net Present Value (NPV): Positive, indicating undervaluation relative to intrinsic value.

6.2 Relative Multiples:

• Forward P/E: In line with or slightly below industry averages, suggesting potential for appreciation.

6.3 Scenario Matrix:

• 5-Year IRR: Projected to meet or exceed target IRR under base and bull scenarios.

7. Balance-Sheet & Risk Stress-Testing

7.1 Liquidity & Leverage:

• Debt Maturities: Well-structured with manageable repayment schedules.

• Covenant Headroom: Sufficient to accommodate operational needs.

7.2 Macro-Shock Scenarios:

• Recession: Potential impact on discretionary healthcare spending.

• Commodity Spikes: Minimal direct exposure.

• FX Swings: Managed through hedging strategies.

7.3 Execution Risks & Accounting Flags:

• M&A Integration: Ongoing monitoring of recent acquisitions.

• Pipeline Delays: Potential impact on revenue projections.

• Unusual Accounting: No significant concerns identified.

8. Market Sentiment & Technical Indicators

8.1 Share-Price Trends:

• Volatility: Moderate, reflecting market dynamics.

• Volume Patterns: Consistent with institutional investor activity.

8.2 Short-Interest, Put/Call Ratios, Insider Trades, Analyst-Revision Momentum:

• Short-Interest: Low, indicating positive sentiment.

• Put/Call Ratios: Balanced, suggesting neutral market expectations.

• Insider Trades: No significant insider selling.

• Analyst Revisions: Upward revisions reflecting confidence in growth prospects.

9. External & Thematic Factors

9.1 ESG Analysis:

• Environmental Footprint: Commitment to sustainability initiatives.

• Social Practices: Focus on diversity and inclusion.

• Governance Scores: Strong governance practices with no major controversies.

9.2 Geopolitical Risks:

• Trade Policies: Potential impact from international trade tensions.

• Regional Instability: Monitoring for effects on global operations.