Eli Lilly and Company
LLY
$1220.28
+0.43%
Eli Lilly & Co. is a global pharmaceutical company focused on neuroscience, cardiometabolic, cancer, and immunology, with key products including Mounjaro, Zepbound, and Verzenio. As a market leader in the GLP-1 and obesity drug space, Lilly has established a dominant competitive position, leveraging its pipeline and manufacturing scale to outpace rivals like Novo Nordisk. The current investor narrative centers on the explosive growth of its weight-loss franchise, recent FDA filing timelines for next-generation drugs like retatrutide, and strategic acquisitions to diversify beyond metabolic diseases, all while managing a premium valuation and capacity expansion challenges.…
LLY
Eli Lilly and Company
$1220.28
Related headlines
Investment Opinion: Should I buy LLY Today?
Rating: Buy. Eli Lilly's explosive growth, dominant market position, and strong profitability justify a Buy rating, despite the premium valuation. The consensus analyst rating is Buy with an average target of $1,276.96, implying 7.1% upside. The thesis is supported by 55.5% YoY revenue growth, 83.8% gross margin, 45.6% operating margin, and a PEG of 0.49, which suggests the stock is undervalued relative to its growth rate.
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LLY 12-Month Price Forecast
Eli Lilly's growth trajectory is exceptional, with revenue accelerating and margins expanding. The valuation, while premium, is supported by the PEG ratio and forward earnings growth. The main risk is competition, but Lilly's pipeline and manufacturing scale provide a moat. I would upgrade to a more bullish stance if retatrutide shows superior efficacy in trials, and downgrade if competitive threats materialize or growth decelerates below 30%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Eli Lilly and Company's 12-month outlook, with a consensus price target around $1299.01 and implied upside of +6.5% versus the current price.
Average Target
$1299.01
0 analysts
Implied Upside
+6.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$850 - $1600
Analyst target range
Eli Lilly is covered by 26 analysts, with a consensus recommendation of 'Buy' (mean rating of 1.71 on a 1-5 scale, where 1 is Strong Buy). The average target price is $1,276.96, implying a 7.1% upside from the current price of $1,191.94. The distribution is heavily bullish, with no sell ratings and only a few hold ratings, as recent actions from firms like Citigroup, UBS, and Morgan Stanley reaffirm Buy or Overweight ratings. The target range spans from $850 (low) to $1,600 (high), with the high target assuming continued dominance in obesity drugs and successful pipeline execution, while the low target reflects risks from competition, pricing pressure, or regulatory setbacks. The wide spread of $750 indicates high uncertainty about the pace of growth and market share retention, but the overall sentiment remains strongly positive.
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Bulls vs Bears: LLY Investment Factors
Eli Lilly presents a compelling growth story with explosive revenue growth, dominant market position in GLP-1 drugs, and strong profitability. However, the premium valuation and high debt levels introduce significant risk. The bull case is currently stronger, driven by accelerating growth and a clear pipeline catalyst (retatrutide), but the stock's valuation leaves little margin for error. The key tension is whether Lilly can sustain its growth trajectory to justify the premium multiple, or if competition and pricing pressures will compress earnings growth and the stock's valuation.
Bullish
- Explosive Revenue Growth: Q1 2026 revenue surged 55.5% YoY to $19.8B, up from $12.7B in Q1 2025, driven by Mounjaro and Zepbound. Sequential growth from $15.6B in Q2 2025 to $19.8B in Q1 2026 shows accelerating momentum.
- Dominant GLP-1 Franchise: Cardiometabolic segment contributed $15.76B in Q1 2026, representing ~80% of total revenue. With retatrutide's FDA filing timeline set, Lilly solidifies its lead over Novo Nordisk, as highlighted in recent news.
- Strong Profitability and Margins: Gross margin stands at 83.8%, operating margin at 45.6%, and net margin at 31.7%. Q1 2026 net income of $7.4B (37.4% net margin) demonstrates exceptional earnings power.
- Attractive PEG Ratio: PEG ratio of 0.49 suggests the stock is undervalued relative to its growth rate, despite a trailing PE of 46.7x. Forward PE of 25.8x implies significant earnings growth ahead.
Bearish
- Premium Valuation: Trailing PE of 46.7x is 112% above the industry average of 22x. Even forward PE of 25.8x is at a premium, leaving little room for error in earnings estimates.
- High Debt Levels: Debt-to-equity ratio of 1.60 indicates significant leverage, which could strain cash flows if growth slows or interest rates remain elevated. Interest expense was $332M in Q1 2026.
- Competitive Threats: Pfizer's berobenatide and Viking Therapeutics' pipeline pose potential competition in the weight-loss market. Any clinical setbacks or pricing pressure could erode Lilly's market share.
- Recent Price Volatility: Stock fell from $1,249.45 high to $851.21 in April 2026, a 32% drawdown, before recovering. Beta of 0.506 is low, but the stock's sensitivity to news and sentiment is high.
LLY Technical Analysis
Eli Lilly's stock is in a strong long-term uptrend, with a 1-year price change of +59.7%, significantly outperforming the S&P 500's +21.5%. The current price of $1,191.94 sits at 95.4% of its 52-week range (between $623.78 low and $1,249.45 high), indicating the stock is trading near its highs, reflecting robust momentum but also potential overextension. The 6-month change of +12.6% and 3-month change of +25.7% confirm the sustained bullish trend, though the 1-month change of -3.5% suggests a short-term pullback from the recent peak.
Beta
0.51
0.51x market volatility
Max Drawdown
-23.3%
Largest decline past year
52-Week Range
$645-$1249
Price range past year
Annual Return
+90.8%
Cumulative gain past year
| Period | LLY Return | S&P 500 |
|---|---|---|
| 1m | +3.2% | +3.1% |
| 3m | +21.2% | +3.3% |
| 6m | +17.3% | +13.3% |
| 1y | +90.8% | +20.2% |
| ytd | +13.0% | +13.3% |
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LLY Fundamental Analysis
Eli Lilly's revenue trajectory is accelerating, with Q1 2026 revenue of $19.8 billion, representing a 55.5% YoY growth rate, up from $12.7 billion in Q1 2025. The multi-quarter trend shows sequential growth from $15.6 billion in Q2 2025 to $19.8 billion in Q1 2026, driven primarily by the cardiometabolic segment (which contributed $15.76 billion in the latest quarter) and oncology ($2.27 billion). This growth is fueled by strong demand for Mounjaro and Zepbound, with the company raising guidance after Q2 earnings beat. The revenue growth is broad-based, with immunology and neuroscience also contributing, though at smaller scales.
Quarterly Revenue
$19.8B
2026-03
Revenue YoY Growth
+55.5%
YoY Comparison
Gross Margin
81.9%
Latest Quarter
Free Cash Flow
$13.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is LLY Overvalued?
Given Eli Lilly's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 46.7x, while the forward PE is 25.8x, indicating the market expects significant earnings growth (a 45% forward earnings yield expansion). The PEG ratio of 0.49 suggests the stock is undervalued relative to its growth rate, but this is based on consensus estimates that may be optimistic. Compared to the industry average PE of 22x (from valuation data), Lilly trades at a 112% premium, reflecting its superior growth and market position in the GLP-1 space.
PE
46.7x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 28x~76x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
35.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are notable: Lilly's debt-to-equity ratio of 1.60 indicates substantial leverage, with interest expense of $332M in Q1 2026. While free cash flow is positive at $13.6B TTM, the company's aggressive capacity expansion and R&D spending (3.51B in Q1) could strain cash flows if revenue growth decelerates. The payout ratio of 26% is manageable, but the dividend yield is only 0.56%, offering little income support. Revenue concentration in cardiometabolic products (80% of Q1 revenue) creates vulnerability to any disruption in that segment.
FAQ
Key risks include: 1) Competitive pressure from Novo Nordisk, Pfizer, and Viking Therapeutics, which could erode market share. 2) High debt levels (D/E 1.6) that could strain cash flows if growth slows. 3) Regulatory or pricing pressures on GLP-1 drugs. 4) Revenue concentration in Mounjaro and Zepbound, making the company vulnerable to any negative news. The most severe risk is a significant slowdown in growth, which could lead to a de-rating of the stock.
Analysts have a 12-month average target of $1,276.96, with a range of $850 to $1,600. Our base case (50% probability) sees the stock trading around $1,200-$1,350, driven by continued growth. The bull case (30%) targets $1,400-$1,600 if retatrutide succeeds, while the bear case (20%) could see $850-$1,000 if competition intensifies. The most likely scenario is the base case, assuming growth continues at a strong but moderating pace.
LLY trades at a trailing PE of 46.7x, a 112% premium to the industry average of 22x, indicating overvaluation on a trailing basis. However, the forward PE of 25.8x and PEG of 0.49 suggest it's undervalued relative to its growth rate. The market is pricing in strong future earnings growth, which is justified by the current momentum.
LLY is a good buy for investors seeking high growth, given its 55.5% revenue growth and dominant market position. The analyst consensus is Buy with 7.1% upside to the average target. However, the premium valuation (PE 46.7x) and high debt (D/E 1.6) mean it's not without risk. It's best suited for those with a high risk tolerance and a long-term horizon.
LLY is more suitable for long-term investment due to its growth stage and pipeline potential. The stock has a beta of 0.506, indicating lower volatility than the market, but it has experienced significant drawdowns (e.g., -23.3% max drawdown). The dividend yield is low at 0.56%, so income investors may look elsewhere. A minimum holding period of 3-5 years is recommended to ride out volatility and capture the full value of the pipeline.