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Is Eli Lilly's Stock in a Bubble?

Tracey Ryniec
·2 分鐘文章

  • (1:00) - Breaking Down Eli Lilly’s Performance: Is It Still Worth Buy Right Now?

  • (11:30) - Taking A Look At The Competition: Is Their Valuation More Attractive?

  • (17:20) - Episode Roundup: LLY, NVO

  • Podcast@Zacks.com

 

Welcome to Episode #410 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.

This week, Tracey is going solo to discuss Eli Lilly (LLY) and it’s incredible stock run over the last five years.

Is it a bubble?

Definition of a Bubble

Reminder, just because an asset goes up in price doesn’t mean it’s in a bubble. Even if that asset hits new highs day after day, that doesn’t mean it’s a bubble.

A “bubble” usually has other indicators outside of a new high price. Those can include speculation, fraud, and a belief that the price will NEVER go lower, among other things.

Shares of Eli Lilly Soar to New Highs

It’s been a wild five years for Eli Lilly’s stock. It’s up 656% during that period versus 78.4% for the S&P 500.

But because of its big move, many have been asking: is it in a bubble?

Tracey takes a closer look at Eli Lilly, and its competitor, Novo Nordisk.

Eli Lilly and Novo Nordisk: Too Hot to Handle?

1.      Eli Lilly & Co. (LLY)

Shares of Eli Lilly are up 41% year-to-date as earnings and sales are expected to soar this year. However, shares are off the recent all-time highs on worries about competitors in the weight loss drug space.

Earnings are expected to jump 118% in 2024 and 41% in 2025. Eli Lilly’s forward P/E has fallen in the last month, along with the shares, and is now at 62x.

Is Eli Lilly a bubble?

2.      Novo Nordisk (NVO)

Novo Nordisk is the maker of the drug Ozempic, which can be used for weight loss. Shares of Novo Nordisk are up 23.6% year-to-date but have fallen 10% in the last month.

Earnings are expected to rise 25% in 2024 and another 28.6% in 2025. That is not quite as hot as Eli Lilly. However, Novo Nordisk trades at just 38x forward earnings.

Is Novo Nordisk a bubble?

What else do you need to know about Eli Lilly and bubbles?  

Tune into this week’s video podcast to find out.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Novo Nordisk A/S (NVO) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research