PFE - Eli Lilly: Very Strong Fundamentals But Market Is Euphoric

2024-02-15 14:03:45 ET

Summary

• Eli Lilly's financial results for Q4 2023 showed a 28% increase in total revenue compared to the same period last year.
• The company's new launch, Zepbound, is expected to drive sales growth in 2024 and contribute to a projected revenue growth of 18-22%.
• Eli Lilly's gross margin and net margin indicate a potential durable competitive advantage compared to its peers in the healthcare sector.

My Thesis

My investment thesis and outlook for Eli Lilly ( LLY ) is based on the dissonance between quantitative valuation metrics and the current share price. The growth expected by the market by analysts is also not properly parameterized for the stock. This takes us into a highly speculative zone.

Therefore, the only reasonable justification for such expensive valuations is the belief that Revenue in 2024 will be substantially increased from the new drugs recently approved by regulators - Zepbound , Ebglyss ( only on EU ), Omvoh and Jaypirca , in addition to Mounjaro's resilience....

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