Eli Lilly (LLY) Shows Potential Upside with Bullish Indicators and Promising Drug Trials

Summary

Eli Lilly and Company (LLY) operates in a pharmaceutical industry with the most recent closing price of $609.19 on October 13, 2023.

Price and Volume Analysis

On the said date, the stock experienced a minor decline of 1.30 (-0.21%) from its previous day close. It has been trading within a day range of $602.56 to $629.97 and a year range of $309.2 to the year high of $629.97, demonstrating potential for considerable upside from its year low.

The trading volume of LLY is relatively low compared to its average, with a recorded volume of 1.72 million shares as against the average volume of 2.96 million shares. This lower than average trading volume suggests less active trading.

Technical Indicators

LLY's 50-day Moving Average stands at $554.17 while its 200-day Moving Average sits at $430.75, and the stock is trading above both these averages, indicating a bullish trend. The RSI14 is 75, which is a bit high and might suggest the stock is potentially overbought in the short-term horizon.

However, the MACD (3-month) is -12.556617 indicating a possible bearish momentum on the horizon. The ATR amounts to 2.50, revealing a typical volatility for the stock.

The immediate support for LLY is at $605.28, and resistance at $610.5, which are significant levels to monitor in the immediate context.

Fundamental Analysis

The market capitalization of LLY stands at $583.64 billion, marking it as a gigantic company in the market. The company's EPS is $7.19, and it has a fairly high P/E ratio of 85.51, suggesting the market holds high growth expectations for the company.

LLY's next earnings announcement is anticipated to be released on 11/02/2023 which could potentially stir market interest and activity.

One important metric to look at is the discounted cash flow (DCF) with the current figure standing at $617.09, which is higher than the recent closing price. This could signal some undervaluation.

Analyst Recommendations and Price Targets

According to analyst recommendations, the company has received primarily 'Buy' rating with 15 buys and no sell or hold recommendations.

The target high is set at $673, suggesting a considerable upside potential. This high target, alongside the strong consensus 'Buy' recommendation adds to the bullish sentiment around this stock.

News Analysis

Recently published news has highlighted LLY's resilience as a business with a promising dividend track record. The latest developments regarding mirikizumab meeting Crohn’s disease study goals offer a positive perspective for the company’s future performance.

Prediction for Next Trading Day and Week

Given the technical and fundamental data, LLY’s stock price may see minor correction in the near-term due to high RSI and negative MACD. But, considering the success of mirikizumab trials and 'buy' consensus, it’s expected that LLY’s stock price will continue to trend upwards in the upcoming week.

Final Evaluation

In conclusion, considering the company’s strong financials, recent developments in drug trials, bullish technical indicators such as DCF, average price targets, and analysts' buy recommendations, Eli Lilly and Company (LLY) appears to be a 'Buy'. However, short-term market volatility due to technical indicators should be expected. Given the inherent risks involved with stock market investments, all these factors should be weighed carefully before making a decision.