LLY is now overvalued and could go down -42%

Based on our analysis, Lilly (Eli) & Company has been assigned an overvalued rating of 1 out of 5 stars by Cashu. This assessment is primarily driven by several key financial ratios that indicate the company may be trading at an unsustainable premium compared to its sector. Firstly, the Price-to-Earnings (PE) ratio for Lilly stands at 62.95, significantly higher than the sector average of 14.18. A high PE ratio often suggests that a company is overvalued relative to its earnings, which can be a warning sign for investors concerned about future growth prospects. Secondly, the Price-to-Book (PB) ratio for Lilly is 51.64, compared to the sector's 2.71. The PB ratio measures a company's market value against its book value. A high PB ratio can indicate that investors are paying much more for each dollar of net assets, which raises concerns about whether the company's stock price is justified. Additionally, Lilly's Dividend Yield stands at 0.69, below the sector average of 1.18. This lower yield suggests that investors receive less income from dividends relative to other companies in the sector, which may deter income-focused investors. In summary, while Lilly (Eli) & Company has strong profit margins and return on equity, its elevated PE and PB ratios, along with a lower dividend yield, suggest that the stock may be overvalued. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.