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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Eli Lilly And Company (XNYS:LLY) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LLY
Name:
ELI LILLY AND COMPANY (XNYS:LLY)
Sector:
2.13B
Industry:
Drug Manufacturers�General
CEO:
Mr. David Ricks
Total Employees:
35,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 7.03% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ELI LILLY AND COMPANY(LLY) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DRUG MANUFACTURERS�GENERAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
301.33
One Month Price Target:
$301.97
Six Month Price Target :
$305.16
Likely Price in One Year's Time:
Ticker:
$308.98
Likely Trading Range Today Under (Normal Volatility)
$300.68
Price Upper limit ($) :
$302.93
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$288.16
This week:
$271.89
This month :
$242.45
Other Primary facts
Market Cap:
291.58B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
950.17M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.68%
-10.%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$362.30
$333.51
$240.36
$269.15
Medium risk (<10%) entry points
Buy Call
Sell Call
$324.14
Buy Put:
Sell Put:
$318.00
$278.44
$284.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LLY
Sharpe Ratio:
6.72%
Comparison:
LLY, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 242.86% higher than the industry
& ratio is 194.81% higher than the market/S&P 500 average
Average Returns/Yield of
LLY
Daily returns:
0.16%
Weekly returns:
0.78%
Monthly returns:
3.14%
Yearly returns:
11.30%
Comparison of returns:
Average annual returns/yield (last 3 years) is 233.18% above industry average
Classification:
LLY, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.44
Statistical test of Returns:
LLY has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.20%
Weekly Volatility:
4.93%
Monthly Volatility:
9.86%
Yearly Volatility:
34.14%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.30%
Volatility in last five trading days has been 4.38% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.37%
Weekly VaR:
-9.77%
Monthly VaR:
-19.54%
How Much Can the price of
LLY
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-67.69%
This translates to price declining to:
$254.70
This translates to price declining to:
$97.36
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LLY is a 37.91% riskier investment compared to the market/S&P 500 & is 18.15% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 16.13% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LLY
Beta in relation to market/S&P 500--0.38
Expected beta in 1 year's time:
0.566
Expected beta in 3 year's time:
0.8
Unlevered (debt free) Beta:
0.152
Beta in relation to Nasdaq (XNAS):
0.514
Beta in relation to all global stocks::
0.507
Beta Comparison & Analysis
Beta of competitors/peers::
0.657
Beta is -42.54% lower than peers
Average Industry Beta:
0.492
Beta is -23.17% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
32.98%
Sustainable growth rate is -53.11% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.319
Alpha is 567.05% above industry average alpha yield
Alpha is 2032% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LLY
Equity cost of capital:
0.057
Equity cost of capital is -11.97% below industry mean WACC
Unlevered (without debt) cost of capital:
2.32%
Before-tax cost of debt:
1.05%
After-tax cost of debt:
0.83%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.83%
WACC is -17.94% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$30.86
Revenue growth rate per share of (3Y):
30.69
Annual revenue growth rate is 32.82% above the industry average
EPS:
$6.74
Expected Annual growth rate of EPS (3Y):
-11.02%
Expected future EPS growth rate is 504.73% higher than the Drug Manufacturers�General industry
Free cash flow (FCF) per share:
$6.61
Balance sheet equity growth per share: 51.30%
Equity growth rate per share is 121.52% higher than the industry
Debt per share
$15.95
EBITDA per share
$8.53
Valuation Analysis Today of
LLY
P/E Ratio:
48.09
P/E Ratio of Competitors/Peers:
71.81
P/E ratio is -33.04% lower than main peers & is 165.85% higher than the industry
Stock price/value with industry average P/E ratio: $121.91
LLY is 147.18% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $392.44
Present value of the expected future dividends only: $306.45
P/S (Price to Sales ratio):
9.76
Price to sales ratio is 162.88% above the industry mean
P/B (Price to book value ratio):
30.69
Price to free cash flow: 45.57
-
Net income growth rate (3Y):
95.70%
Net income growth rate is -27.91% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 14.45%
Dividend yeild: 1.21%
Previous Dividend: $0.98
Previous adjusted dividend: $0.98
Previous Dividend: $3.66
Expected next dividend best case: $1.07
Expected next dividend worst case: $0.89
Average dividend payment (long-term): $0.82
Average dividend increase/decrease (growth rate) % per period: 4.49%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/01/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/02/2022
Dividend History:
2022-05-13--$0.98
2021-11-12--$0.85
2021-05-13--$0.85
2022-02-14--$0.98
2021-08-12--$0.85
2021-02-11--$0.85
Dividend growth rate is -40.26% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
162.40%
Net debt to equity ratio:
150.57%
Debt to assets ratio:
32.30%
Net debt to assets ratio:
29.94%
Debt-to-asset ratio is -52.57% below industry average
Ability to repay debt:
Interest coverage ratio:
46.57
Interest coverage ratio is 8.65% more than industry average
Looking forward:
Debt growth rate:
1.74%
Annual debt growth is -410% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.48%
Analysis of Key Statistics
Correlation of price movement with the market:
0.491
Statistical significance of correlation:
LLY has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is -5.12% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.009
Covariance of price movement with the market:
0.011
Kurtosis
10.443
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.428
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
LLY
Gross Profit Margin Ratio:
298%
Operating Profit Margin Ratio:
26.02%
Operating profit margin is 19.87% higher than the industry
Net Profit Margin Ratio:
298%
Effective Tax Rate:
8.96%
Effective tax rate is -14.39% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
65.69%
Return on equity (ROE) is -34.56% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.06%
Return on assets (ROA) is 25.74% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.27
Current ratio is -10.03% below industry average
Cash Conversion Cycle (days):
69.2
Cash conversion cycle is -30.34% below industry average
The remaining useful life of property plant & equipment is: 7.5 years
Stock based compensation to net income ratio:
1.65%
In-depth Efficiency Analysis
Revenue generated per employee:
837.8K
Each employee generates -26% less revenue than industry average revenue per employee
EBITDA generated per employee:
231.5K
Each employee generates -41% less EBITDA than industry average revenue per employee
Profit generated per employee:
175.1K
Each employee generates -21% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
61.0K
Each employee generates -12% less free cash flow than industry average revenue per employee
Assets/Capital per employee
855.8K
Each employee generates -12% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 15.45%
Growth rate in R&D investment/expenditure is -33.29% lower than the industry
Competitors/Peer firms of
LLY
ABBOTT LABORATORIES (XNYS:ABT)
THERMO FISHER SCIENTIFIC INC. (XNYS:TMO)
ABBVIE INC. (XNYS:ABBV)
DANAHER CORPORATION (XNYS:DHR)
MERCK & CO., INC. (XNYS:MRK)
Novartis Inc. (XNYS:NVS)
PFIZER INC. (XNYS:PFE)
ASTRAZENECA PLC (XNAS:AZN)
MEDTRONIC PUBLIC LIMITED COMPANY (XNYS:MDT)
Current Analyst Ratings
Strong buy�17%
Buy�38%
Hold�33%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
29.32B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
7.51B
21.82B
6.95B
-
6.41B
-
-
13.36B
19.80M
174.00M
1.20B
8.10B
7.63B
6.13B
6.73B
603.40M
6.13B
Statement of Cash Flow
Date:
Period:
435.70M
Differed Income Tax :
- 506600.00K
Stock Based Compensation :
101.00M
Change in Working Capital :
179.00M
Accounts Receivables:
-
Other Working Capital:
3.58B
Other Non-Cash Items:
387.20M
Net Cash Provided by Operating Activities:
2.50B
Investments in PP&E:
- 365400.00K
Net Acquisitions:
-
Purchases of Investments:
- 131300.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.46B
109.10M
2.57B
7.81B
3.89B
2.70B
16.96B
9.10B
3.89B
7.48B
2.73B
2.46B
4.29B
29.95B
-
46.92B
1.43B
1.36B
598.30M
-
10.60B
13.39B
15.15B
7.76B
24.20B
-
37.59B
594.10M
9.37B
- 4225300.0K
3.59B
March 31, 2022 at 6:00:00 AM
20.87B
9.33B
46.92B
2.84B
16.51B
14.0B
108.10M
- 625200.00K
- 1013800.00K
- 710100.00K
-
- 1500000.00K
- 885500.00K
217.30M
- 2878300.00K
33.60M
- 1359300.00K
2.46B
3.82B
2.50B
- 365400.00K
2.13B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
LLY
2023
2024
2025
2026
2027
$372.87
$382.34
$392.04
$402.00
$412.20