Yahoo Finance Why Pharmaceutical Eli Lilly & Co. Warrants Attention from Investors Right Now - Stocks in the News
The healthcare and pharmaceutical industries have been receiving large amounts of attention lately as both industries have seen increased amounts of merger and acquisition activity. One stock that warrants investor consideration out of these industries is Eli Lilly & Co. (LLY), a large cap pharmaceutical company that currently has the potential to produce significant gains in the near future based on trends and data regarding the stock and the company that often indicate success.
About Eli Lilly & Co.
Based in Indianapolis, IN, Eli Lilly & Co. discovers, develops, manufactures and sells pharmaceutical products. The company directs its research efforts primarily towards the search for products that aid in the diagnosis, prevention and treatment of human diseases. Some research efforts though are focused to treat diseases in animals, and to increase the level of efficiency of animal food production.
LLY currently holds a Zacks Rank #2 (Buy), making it a stock that warrants investment consideration at the moment. The company resides in the Large Cap Pharmaceuticals Industry, which is currently ranked 83rd out of 265 total industries, placing it in the top 31%.
Recent Momentum Indicating Continued Success
One reason that LLY is an intriguing stock right now is because of its recent positive momentum, which caused the company’s stock to earn a B for its Momentum Style Score. The stock has seen a 52-week positive price change of 34.78%, with the last 12- weeks seeing an increase in price of 20.72%.
LLY’s EPS estimates have also been gaining, also causing a higher grade for the stock’s Momentum Style Score. For its current year EPS estimate, LLY has seen a quarterly change of 2.70%, a monthly change of 2.51%, and in just the last week a change of 2.24%.
Positive Signs From Detailed Estimates
Much of the information Zacks uses when ranking stocks has to do with the estimated growth levels, estimate revision activity and reported earnings history for a company. In regards to LLY, the information found in these segments is positive and favorable, which adds greatly to why it warrants attention from investors right now.
LLY is projected for significant EPS growth in the near future, having estimated growth of 11.93% for the current quarter ending 9/2015, and a growth estimate of 17.43% for the current year ending 12/2015. Its earnings are expected to continue growing next year too, with projected EPS growth of 9.92%.
Analysts have become more positive on the stock’s outlook recently, which can be seen in the recent estimate revision activity levels. For the current year 3 analysts have upped their estimates in just the last 7 days, and a total of 4 analysts have upped their estimates in the last 60 days, with no analysts lowering their estimates for the current year in the last 60 days. The consensus estimate has grown as well for the current year, with the estimate now being $3.25 currently, compared to $3.15 just 30 days ago.
Next year’s estimates have seen a significant amount of revision activity as well, with 3 analysts raising their estimates in the last 30 days, 2 of which coming in the last 7 days, compared to just 1 analyst lowering their estimate in the last 60 days.
Another good sign for investors, LLY has shown the ability to meet and beat the estimates for its earnings. The company has met or beat estimates in each of its last 4 quarters, having an average surprise of 9.36%, and LLY has positive beats in the last 3 quarters consecutively.
Earnings Report for Q2 (Ended 6/2015) Showing LLY’s Strength
LLY’s most recent earnings report, which came from the second quarter of 2015, showed several positive marks that help to show the company’s strength. In addition to a major EPS beat of 21.62% for the quarter, the company also beat revenue estimates and showed substantial growth in several key business segments, as well as posting a decrease in operating expenses.
The Zacks Consensus Estimate for LLY’s revenues was $4.841 billion, and LLY posted a significant beat of this figure with reported revenue of $4.979 billion despite a decline of 4% in revenue, which came from increased generic competition for two of its bigger products in Cymbalta and Evista, as well as from negative currency movement in the quarter.
LLY did see domestic growth in the U.S. though, increasing by 3% to $2.528 billion. It also saw major growth in its Animal Health segment of 40%, with the segment contributing $840.8 million in revenue. The boost was mainly due to LLY’s acquisition of Novartis’ (NVS) Animal Health business segment earlier this year.
Another very positive mark from the report came in the form of lowered operating expenses, which were down 7% to $2.769 billion for the quarter. This was mainly due to decreased in Research & Development spending declining 5%, as well as marketing, selling and administrative spending declining 8%.
Bottom Line
As one can clearly see through the information above, Eli Lilly & Co. clearly warrants attention from investors. With positive recent momentum, favorable earnings estimate figures and information, and its strong recent quarter, in addition to its high Zacks Rank and presence in a highly ranked industry, LLY certainly is a strong candidate for investment. Moving forward LLY should without a doubt be on the radar of investors everywhere, as this stock has a multitude of positive indicators that point to its potential for success in the near future.
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LILLY ELI & CO (LLY): Free Stock Analysis Report
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