LLY - Embedded Expectations Analysis - 2021 02 05
Eli Lilly and Company (LLY:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 26.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about declining operating margins, the sustainability of Trulicity growth, and their clinical trialsSpecifically, they may lack confidence in their ability to mitigate operating margin declines, sustain Trulicity's volume growth, and improve Trulicity's Medicaid access. Furthermore, they may have concerns about the efficacy of Jardiance on patients with HFrEF, Verzenio on patients with early breast cancer, and donanemab on Alzheimer's patients. Moreover, management may be exaggerating their growth outlook, the potential of their Tirzepatide treatment and the GLP class products, and the prudence of their capital investments. Additionally, they may be concerned about the likelihood of bamlanivimab passing its clinical trials, the impact of SURPASS-1 trial patients dropping out, and the sustainability of their new oncology product uptake. Finally, management may have concerns about political and pricing headwinds, their decision to make significant investments in R&D to develop COVID-19 treatments, and the impact of the FDA's aducanumab review on other Alzheimer's treatments
Eli Lilly and Company discovers, develops, manufactures, and markets products in a single business segment: human pharmaceutical products. The company's human pharmaceutical products include: diabetes and other endocrinology products, immunology products, neuroscience products, oncology products, and other products. The company's diabetes and other endocrinology products include: Baqsimi? and Basaglar?. The company's immunology products include: Olumiant? and Taltz?. The company's neuroscience products include: Cymbalta? and Emgality?. The company's oncology products include: Alimta?, Cyramza?, Erbitux? and Verzenio?. The company's other products include: Cialis?.
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