Eli Lilly & Co

LLY

Pharmaceutical Preparations

Mkt Cap

$532.4B

PE

106.73

Debt

$20.17B

Cash

$2.381B

EV

$550.2B

FCF

$3.254B

Market Cap

$532.4B

P/E Ratio

106.73

Debt

$20.17B

Cash

$2.381B

EV

$550.2B

FCF

$3.254B

Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. It offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; and Jardiance, Trajenta, and Trulicity for type 2 diabetes. The company provides Alimta for non-small cell lung cancer (NSCLC) and malignant pleural mesothelioma; Cyramza for metastatic gastric cancer, gastro-esophageal junction adenocarcinoma, metastatic NSCLC, metastatic colorectal cancer, and hepatocellular carcinoma; Erbitux for colorectal cancers, and various head and neck cancers; Retevmo for metastatic NSCLC, medullary thyroid cancer, and thyroid cancer; Tyvyt for relapsed or refractory classic Hodgkin's lymph and non-squamous NSCLC; and Verzenio for HR+, HER2- metastatic breast cancer, node positive, and early breast cancer. It offers Olumiant for rheumatoid arthritis; and Taltz for plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondylarthritis. The company offers Cymbalta for depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, fibromyalgia, and chronic musculoskeletal pain; Emgality for migraine prevention and episodic cluster headache; and Zyprexa for schizophrenia, bipolar I disorder, and bipolar maintenance. Its Bamlanivimab and etesevimab, and Bebtelovimab for COVID-19; Cialis for erectile dysfunction and benign prostatic hyperplasia; and Forteo for osteoporosis. The company has collaborations with Incyte Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; AbCellera Biologics Inc.; Junshi Biosciences; Regor Therapeutics Group; Lycia Therapeutics, Inc.; Kumquat Biosciences Inc.; Entos Pharmaceuticals Inc.; and Foghorn Therapeutics Inc. Eli Lilly and Company was founded in 1876 and is headquartered in Indianapolis, Indiana.

Sector

10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18

DCF

Discounted Cash Flow Valuation of Eli Lilly & Co

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$3.254B	$3.495B	$3.745B	$4.003B	$4.268B	$4.539B	$4.814B	$5.094B	$5.376B	$5.659B	$5.942B	$59.42B
DCF		$3.04B	$2.832B	$2.632B	$2.44B	$2.257B	$2.081B	$1.915B	$1.757B	$1.609B	$1.469B	$14.69B
Value	$36.72B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 17%

Earnings Stability 44%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2014	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	TTM
Net Margin	12%	12%	13%	-0.89%	13%	37%	25%	20%	22%	16%
ROA	8.5%	7.8%	8.7%	4.9%	8.6%	13%	16%	13%	14%	11%
ROE	16%	17%	19%	-1.7%	30%	310%	110%	61%	58%	44%

What is the average Net Margin?

The average Net Margin over the past 5 years is +19.39%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +3.47%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +11.47%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.67%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +93.55%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +5.45%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2014	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	TTM
Debt FCF	2.51	4.68	2.87	3.01	2.96	4.03	3.25	3.07	3.12	6.20
Debt Equity	0.52	0.55	0.78	1.17	1.17	5.67	2.85	2.00	1.51	1.78
MIN
Graham Stability	-	-	87%	-8.1%	100%	100%	100%	94%	93%	-8.1%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.20.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.00.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.08.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2015	12-2017	12-2019	12-2021	Trend
Revenue	5.2%	4.5%	8.5%	0.79%	1.6%
Net Income	15%	-	-9.1%	12%	4.7%
Stockholders Equity	-4.2%	-1.6%	59%	18%	8.2%
FCF	17%	2.9%	11%	-12%	1%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +4.53%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.58%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +4.69%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -1.58%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +8.16%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +2.88%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +1.01%.