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Tuesday, October 27, 2020

Investor Confidence is Falling for Eli Lilly and Company (NYSE:LLY)

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Eli Lilly and Company (LLY) shares are trading at lower $154.49 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $165.13.

To add more color to this target, the company’s high over the last year is $170.75 and the low is $101.36. Over the last 52 weeks, LLY is up 42.57% while the S&P 500 is up 18.95%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, LLY reported a profit of $4.28 billion. Eli Lilly and Company also saw revenues increase to $5.5 billion. In addition, LLY has free cash flow of $2.34 billion as of 06-2020. The company’s EBITDA came in at $1.52 billion which compares well with its peers.

LLY booked profit margins of 24.50%, its Return on Equity (ROE) is 170.70%, and its Return on Assets is 14.00%. All told, it is clear that, LLY needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. LLY has a short ratio of 1.99 and outstanding shares of 907.20M.

Company Outlook

LLY has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 3.83 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 6.15. Eli Lilly and Company LLY also noted assets of $41.97 billion at the end of the last quarter. Investors should also keep an eye on sector updates as LLY has historically followed its peers on positive news.

All told, Eli Lilly and Company LLY has strung together solid data and demonstrated underlying fundamentals. At its current valuation, LLY represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Eli Lilly and Company LLY is now commanding a market cap of 144.58B and a float of 743.73M. LLY is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of LLY stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in LLY, either long or short, and we have not been compensated for this article.

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