Buy LLY Stock At $820?

Core Insights - The pharmaceutical sector is undergoing a rerating as investors reassess the impact of tariffs and drug price cuts, leading to a rally in major pharma stocks, particularly Eli Lilly [3][4] - Eli Lilly is noted for its monopoly-like high margins and discounted valuation, making it an attractive investment despite a recent 13% stock increase [4][10] Financial Performance - Eli Lilly reported a revenue growth of 36.8% over the last twelve months (LTM) and an average growth of 23.4% over the past three years [10] - The company has demonstrated strong profitability with an operating cash flow margin of nearly 20.5% and an operating margin of 43.0% LTM [10] - Long-term profitability metrics show an average operating cash flow margin of approximately 17.8% and an operating margin of 35.6% over the last three years [10] - The stock is currently trading at a price-to-sales (P/S) multiple of 13.9, representing a 37% discount compared to one year ago [10] Market Position - Eli Lilly offers innovative pharmaceuticals globally, including treatments for cancer, rheumatoid arthritis, obesity, and autoimmune diseases [6] - The company’s pricing power and high margins contribute to consistent and predictable profits, which are favorable in the market [4] Investment Considerations - The High Quality Portfolio, which includes stocks with high cash flow margins and lower volatility, has outperformed its benchmark with returns exceeding 91% since inception [5] - Despite strong fundamentals, Eli Lilly has experienced significant declines in past market downturns, indicating susceptibility to market volatility [8]