5 Stocks Most Vulnerable to Recession

4. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 53

Eli Lilly and Company (NYSE:LLY) is an Indiana-based pharmaceutical company.

As per Goldman Sachs, Eli Lilly and Company (NYSE:LLY) is one of the stocks having the greatest gaps between its historical recession margin growth and the consensus forecasts for 2023. Analysts anticipate Eli Lilly and Company’s (NYSE:LLY) net profit margin to increase by 2.12% in 2023. Meanwhile, in the past three recessions, the company’s net profit margin has plummeted by 5.84%. There is a 7.96% ppts difference between the two data points. Furthermore, Eli Lilly and Company’s (NYSE:LLY) 12-month forward P/E multiple reflects a premium of 102% when compared to the 20-year P/E median.

Eli Lilly and Company (NYSE:LLY) was discussed in the Q1 2022 investor letter of Baron Funds. Here’s what the firm said:

“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company with a diverse offering primarily focused on therapeutics. Performance was strong mostly due to consistent financial growth powered by its core diabetes (and future obesity) franchise, as well as the constant drumbeat surrounding the Alzheimer’s therapeutic market, of which Eli Lilly has one of the three potential winning blockbuster candidates in Donanemab. We retain conviction in Eli Lilly given the company’s strong long-term growth outlook.”

Two Sigma Advisors slashed its holding in Eli Lilly and Company (NYSE:LLY) by 40% during Q1 2022.