Eli Lily & Co. (LLY)

Eli Lily broke out of the Oct 2010 highs of $37.20 and closed at $37.23.  LLY P/E ratio is a low 8.46, compared to an industry average of 14.44.  If LLY can manage to pull off a more reasonable 10 P/E, it would be worth approximately $44. Interestingly enough the forward P/E is at 10.04 for 2012.  With a beta of only .80, LLY seems to be less risky than the market.   I believe the $44 target is a reasonable estimate of LLY fair value.  In the short term I expect a pull back to the $36.50 level, due to the RSI being above 70 signaling overbought, before continuing the uptrend.  LLY also offers a 5.40% dividend.

via StockCharts.com
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