Eli Lilly and Company (LLY)

Eli Lilly and Company discovers, develops, manufactures, and sells pharmaceutical products worldwide.It has a couple of drugs in its pipeline to treat the disease, including the more advanced solanezumab.

Business

Eli Lilly & Co. has beat its goal of cutting normalized greenhouse gas emissions by 15 percent by 2013,  compared to 2007 levels. It achieved a 16 percent cut against the baseline in 2011. The company cut normalized emissions by six percent year-on-year.

Despite profit pressures in its drug business, Eli Lilly and Co. significantly upped its charitable donations in 2011.It made $597 million in cash, product and in-kind donations last year, compared to $430 million in 2010 and $405 million in 2009.

Financials

The net income increased by 7.3% when compared to the same quarter one year prior, going from $1,236.30 million to $1,326.60 million. The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels.  The net profit margin of 24.37% is above that of the industry average.

Valuation

Eli Lilly & Co. has a market cap of $56.37 billion and is part of the health care sector and drugs industry. At the underlying components of the S&P 500 ordered by largest market capitalization, Eli Lilly & Co. has taken over the #51 spot from Boeing Co. (NYSE: BA).The company has a P/E ratio of 13.2, below the S&P 500 P/E ratio of 17.7.

Technicals

Shares of Eli Lilly & Co. are currently trading at $49.40 with the market $57.35 billion. It has a 52-week low of $37.30 and a 52-week high of $53.99. From a technical standpoint, this stock has technical support in the $44.88-$48.15 price area. If the shares can firm up, we see overhead resistance around the $53.45-$62.43 price levels. MACD (12,26) and RSI(14) are  increasing. The overall technical indicator shows a buy with the $62.43 target price in short term.

Conclusion

The company’s strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. The long-term prospects are good.