PFE vs. LLY: Which Stock Is the Better Value Option?

Group 1 - The article compares Pfizer (PFE) and Eli Lilly (LLY) to determine which stock is a better undervalued investment opportunity in the Large Cap Pharmaceuticals sector [1] - Pfizer currently has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Eli Lilly has a Zacks Rank of 3 (Hold) [3][7] - The Zacks Rank system emphasizes companies with strong earnings estimate revisions, suggesting that PFE is likely experiencing a more favorable earnings outlook compared to LLY [3][7] Group 2 - Valuation metrics are crucial for value investors, with key indicators including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] - Pfizer has a forward P/E ratio of 7.49, significantly lower than Eli Lilly's forward P/E of 34.04, indicating that PFE may be undervalued [5] - The PEG ratio for Pfizer is 0.83, while Eli Lilly's PEG ratio is 1.09, further supporting the notion that PFE is a more attractive value option [5][6] Group 3 - Pfizer's P/B ratio is 1.44, compared to Eli Lilly's P/B of 45.19, highlighting a substantial difference in market value relative to book value [6] - Based on various valuation metrics, Pfizer holds a Value grade of A, while Eli Lilly has a Value grade of C, reinforcing the conclusion that PFE is the superior value option [6][7]