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Eli Lilly (LLY) Gains As Market Dips: What You Should Know

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Eli Lilly (LLY - Free Report) closed the most recent trading day at $113.20, moving +0.88% from the previous trading session. This change outpaced the S&P 500's 1.97% loss on the day. At the same time, the Dow lost 2.32%, and the tech-heavy Nasdaq lost 2.78%.

Prior to today's trading, shares of the drugmaker had gained 3.98% over the past month. This has outpaced the Medical sector's loss of 1.15% and the S&P 500's loss of 3.33% in that time.

Wall Street will be looking for positivity from LLY as it approaches its next earnings report date. This is expected to be January 30, 2019. The company is expected to report EPS of $1.30, up 14.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.32 billion, up 2.63% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.51 per share and revenue of $24.45 billion. These totals would mark changes of +28.74% and +6.92%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for LLY. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.82% higher within the past month. LLY is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, LLY currently has a Forward P/E ratio of 20.36. This valuation marks a premium compared to its industry's average Forward P/E of 14.76.

Investors should also note that LLY has a PEG ratio of 1.81 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 38, putting it in the top 15% of all 250+ industries.

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

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