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The Zacks Medical sector has primarily traded in line with the general market in 2022, down roughly 19%.
A big-time player in the realm, Eli Lilly LLY, is on deck to unveil quarterly earnings on November 1st before the market open.
Eli Lilly is one of the world’s largest pharmaceutical companies, boasting a diversified product profile that includes a solid lineup of new successful drugs.
Currently, the pharmaceutical titan carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of a D.
How does everything else stack up? Let’s take a closer look.
Share Performance & Valuation
LLY shares have been visibly strong in 2022, up more than 30% and leaving the S&P 500 in the dust.
Image Source: Zacks Investment Research
Shares have continued on their market-beating trajectory over the last three months, up nearly 10% and again crushing the S&P 500’s performance.
Image Source: Zacks Investment Research
The strong price action of Eli Lilly shares is undoubtedly a highlight, reflecting that buyers have stepped up to the plate all year long, something we can’t say for the majority of stocks in 2022.
Shares trade at steep multiples; the company’s 45.1X forward earnings multiple is on the higher end, well above its five-year median of 21.1X and reflecting a 105% premium relative to its Zacks Medical sector.
Image Source: Zacks Investment Research
Quarterly Estimates
Two analysts have lowered their earnings outlook for the quarter over the last 60 days. Still, the Zacks Consensus EPS Estimate of $1.97 suggests a Y/Y earnings uptick of a modest 1.6%.
Image Source: Zacks Investment Research
Further, the Zacks Consensus Sales Estimate of $6.9 billion indicates Y/Y revenue growth of roughly 2.1%.
Quarterly Performance & Market Reactions
LLY has struggled to post strong bottom-line results, falling short of the Zacks Consensus EPS Estimate in five of its last six quarters. In its latest print, LLY fell short of earnings expectations by 30%.
Top-line results have been much more positive; LLY has penciled in four revenue beats over its last five quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
In addition, it’s worth noting that the market wasn’t impressed with the company’s latest print, with shares moving downwards by roughly 4% following the release.
Putting Everything Together
LLY shares have been a bright spot in an otherwise dim market in 2022, outperforming the S&P 500 across several timeframes.
The company’s forward earnings multiple is well above its five-year median and its Zacks Medical sector average.
Analysts have primarily bearish in their earnings outlook, with estimates suggesting slight Y/Y upticks in revenue and earnings.
LLY has fallen short of EPS expectations as of late, but revenue results have consistently beat expectations.
Heading into the release, Eli Lilly LLY carries a Zacks Rank #3 (Hold) with an Earnings ESP Score of -2.5%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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