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Eli Lilly (LLY) Stock Drops Despite Market Gains: Important Facts to Note

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In the latest trading session, Eli Lilly (LLY - Free Report) closed at $1,041.51, marking a -3.6% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.64% for the day. Elsewhere, the Dow saw an upswing of 1.23%, while the tech-heavy Nasdaq appreciated by 0.69%.

The drugmaker's shares have seen an increase of 6.93% over the last month, surpassing the Medical sector's gain of 0.63% and the S&P 500's gain of 0.55%.

Investors will be eagerly watching for the performance of Eli Lilly in its upcoming earnings disclosure. The company is predicted to post an EPS of $7.48, indicating a 40.6% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.16 billion, up 34.2% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $23.78 per share and a revenue of $63.97 billion, indicating changes of +83.06% and 0%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for Eli Lilly. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.75% higher. As of now, Eli Lilly holds a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Eli Lilly is holding a Forward P/E ratio of 32.15. This denotes a premium relative to the industry average Forward P/E of 14.5.

Meanwhile, LLY's PEG ratio is currently 0.78. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Large Cap Pharmaceuticals was holding an average PEG ratio of 1.56 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 90, this industry ranks in the top 37% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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