After a 57% run-up over the past 52 weeks, Eli Lilly (NYSE: LLY) shares are expensive. The stock is now trading at 47 times trailing earnings. That's more than double the price-to-earnings ratio of the pharmaceutical industry. There are some sound reasons for that, which, put together, make the stock a buy, in my opinion. First, sales are growing rapidly. Revenue was $24. 4 billion in the third quarter, 39% higher than the same period a year ago. Profits are soaring, too. Earnings per share increased 16% in the quarter, to $7. 22. Even better, management raised its guidance for full-year revenue from $85 billion to $87 billion to $91 billion to $92 billion.
POLARIS INSIGHTS