Analyzing Future Estimates for Eli Lilly and Company
An Analysis of Eli Lilly and Company’s 3Q15 Earnings
Analysts’ estimates
Eli Lilly and Company (LLY) has surpassed all estimates for earnings per share (or EPS) in the past, and analysts estimate that it will generate EPS of $0.78 on sales of $5.3 billion in 4Q15. This translates to year-over-year growth of ~4.2%.
Further to this, EPS is estimated to be $0.85 for 1Q16, $0.85 for 2Q16, $0.90 for 3Q16, and $0.93 for 4Q16.
Annual estimates
The estimated annual EPS for 2015 is $3.35 while the estimate for 2016 is $3.63. Analysts have estimated that revenues for 2015 will improve by 1.6% to $19.9 billion due to the inclusion of Novartis Animal Health as well as strong performances by new products including Trulicity and Cyramza.
The company’s gross margin is expected to increase from 74.8% in 2014 to 77.7% in 2015 and is projected to be 75.8% in 2016. Its operating profit margin is expected to increase from 13.5% to 21.7% in 2015 and to improve further to 22.3% in 2016.
Analyst recommendations
Analysts’ recommendations show a 12-month targeted price of $95.47 per share as compared to the last price of $78.31 per share as of October 25, 2015. Also, 50% of analysts recommend a “buy,” while ~50% analysts recommend a “hold” on Eli Lilly.
The Market Vectors Pharmaceutical ETF (PPH) has invested 4.9% of its portfolio in Eli Lilly, while it has invested 7.9% of its portfolio in Novartis (NVS), 5.6% in Pfizer (PFE), and 5.0% in Merck & Company (MRK).
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