5 Reasons It's Not Too Late to Buy Eli Lilly Stock

Core Viewpoint - Eli Lilly is positioned as a leading growth stock in the healthcare sector, driven by a strong pipeline of innovative drugs, significant investments in manufacturing, robust financial performance, a growing dividend, and an attractive valuation based on its PEG ratio [1][2][15]. Group 1: Drug Pipeline and Growth Opportunities - Eli Lilly has a strong pipeline of drugs, particularly in the GLP-1 category, with approved drugs like Zepbound and Mounjaro expected to generate substantial revenue [3][4]. - The company is also optimistic about its Alzheimer's drug Kisunla and has entered into an agreement with Aktis Oncology to develop targeted cancer treatments, showcasing its commitment to innovation [4][5]. Group 2: Manufacturing Investments - To meet the growing demand for its GLP-1 drugs, Eli Lilly is investing heavily in U.S. manufacturing, with plans to invest $27 billion in four new manufacturing locations [6][7]. - Over the past five years, the company has announced more than $50 billion in manufacturing investments, marking it as the largest pharmaceutical expansion investment in U.S. history [7]. Group 3: Financial Performance - Eli Lilly's revenue increased by 32% to over $45 billion last year, with net income doubling to $10.6 billion and cash flow from operations reaching $8.8 billion [9][10]. - The company has demonstrated strong financials, allowing it to reinvest in its operations and pipeline for future growth [10]. Group 4: Dividend Growth - Eli Lilly has a growing dividend, with a recent 15% increase announced in December, marking the seventh consecutive year of significant dividend boosts [11][12]. - The company's dividend growth is expected to continue, providing long-term investors with a valuable income stream [12]. Group 5: Valuation Metrics - Despite trading at close to 70 times its trailing earnings, Eli Lilly's PEG ratio of 1.2 suggests that the stock remains a solid buy when considering expected growth [13][14]. - The modest PEG ratio indicates that the stock is not as expensive as it may initially appear, making it an attractive investment opportunity [14].