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Eli Lilly Rated High for Growth Potential Under Guru Strategy

Eli Lilly shines with an 88% rating. The report highlights strong fundamentals but points to research spending as a concern.

Date: 
AI Rating:   7

Eli Lilly & Co (LLY) has been rated positively based on the P/B Growth Investor model from Validea, achieving an impressive 88% score. This score indicates a strong interest in the stock, reflecting solid underlying fundamentals and valuation metrics.

The analysis reveals that Eli Lilly meets several critical criteria of the growth investing strategy:

  • Book/Market Ratio: PASS
  • Return on Assets: PASS
  • Cash Flow from Operations to Assets: PASS
  • Cash Flow from Operations to Assets vs. Return on Assets: PASS
  • Return on Assets Variance: PASS
  • Sales Variance: PASS
  • Advertising to Assets: PASS
  • Capital Expenditures to Assets: PASS

However, it failed in one significant area:

  • Research and Development to Assets: FAIL

This failure in R&D allocation may suggest missed opportunities for growth or innovation, which could dampen future earnings potential if not addressed.

Investor attention may be warranted given its high rating across multiple areas, yet the failing R&D metric could potentially affect investor sentiment and future stock performance. Balancing the need for growth through research investment with strong existing fundamentals makes Eli Lilly a stock to monitor closely.

Stocks:  LLY