Eli Lilly and Company
LLY
$1148.84
-0.53%
Eli Lilly & Co. is a global pharmaceutical leader focused on neuroscience, cardiometabolic, cancer, and immunology, with key products including Mounjaro, Zepbound, Verzenio, and Taltz. As a top-tier innovator in the high-growth GLP-1 weight-loss and diabetes market, Lilly has established itself as a dominant force, with its weight-loss franchise now accounting for nearly two-thirds of revenue. The current investor narrative centers on the company's explosive growth driven by Mounjaro and Zepbound, alongside strategic acquisitions like AtaiBeckley to diversify its pipeline, while facing competitive pressures from oral Wegovy and concerns about valuation concentration. Recent headlines highlight both the promise of its pipeline and the risks of over-reliance on a single therapeutic category.…
LLY
Eli Lilly and Company
$1148.84
Related headlines
Investment Opinion: Should I buy LLY Today?
Rating & Thesis: We rate Eli Lilly as a Buy, driven by its exceptional revenue growth, strong profitability, and attractive PEG ratio. The analyst consensus is Buy with an average target price of $1,276.96, implying 11.2% upside. The core thesis is that Lilly's dominance in the high-growth GLP-1 market, coupled with pipeline diversification, will sustain above-average earnings growth, justifying its premium valuation.
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LLY 12-Month Price Forecast
The AI assessment is bullish with medium confidence, driven by Lilly's exceptional growth metrics and attractive valuation on a PEG basis. However, the concentration risk and competitive threats warrant caution. The stance would be upgraded to high confidence if the company demonstrates continued market share gains and successful pipeline diversification. Conversely, a downgrade to neutral would occur if revenue growth decelerates below 30% or if competitive pressures intensify significantly.
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 $1276.96 and implied upside of +11.2% versus the current price.
Average Target
$1276.96
0 analysts
Implied Upside
+11.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$850 - $1600
Analyst target range
The target price range spans from a low of $850.00 to a high of $1,600.00, indicating a wide dispersion of expectations. The high target of $1,600 implies a 39.3% upside, likely assuming continued dominance in the GLP-1 market and successful pipeline expansion, while the low target of $850 suggests a 26.0% downside, possibly pricing in competitive threats or regulatory risks. Recent ratings from major firms like Citigroup, Morgan Stanley, and JP Morgan have all been reaffirmed as Buy or Overweight, with no downgrades, reinforcing the positive sentiment. The wide range reflects high uncertainty about the sustainability of growth and competitive dynamics, but the overall consensus remains firmly bullish.
Bulls vs Bears: LLY Investment Factors
Eli Lilly presents a compelling growth story with exceptional revenue acceleration, robust profitability, and a strong pipeline, but faces significant concentration risk and a premium valuation. The bull case is currently stronger, driven by the explosive growth of its GLP-1 franchise and a PEG ratio of 0.49 suggesting undervaluation relative to growth. However, the single most important tension is whether the company can sustain its growth momentum in the face of competitive threats like oral Wegovy and regulatory pressures. If growth decelerates or competition intensifies, the stock could face multiple compression, given its high expectations. Conversely, continued dominance and pipeline success could justify further upside.
Bullish
- Explosive Revenue Growth: Q1 2026 revenue surged 55.5% YoY to $19.80B, accelerating from 35.5% growth in Q1 2025, driven by the GLP-1 franchise (Mounjaro, Zepbound) which generated $15.76B. This rapid acceleration demonstrates robust demand and market leadership.
- Undervalued on PEG Ratio: With a PEG ratio of 0.49, the stock trades at a significant discount to its growth rate, suggesting the market has not fully priced in future earnings expansion. A PEG below 1 typically signals attractive value for growth investors.
- Strong Profitability and Margins: Gross margin stands at 83.8%, operating margin at 45.6%, and net margin at 31.7% for Q1 2026, reflecting exceptional pricing power and operational efficiency. Net income of $7.40B in Q1 2026 underscores the company's ability to convert revenue into profit.
- Analyst Consensus is Buy: With 26 analysts, the consensus rating is 'Buy' (mean 1.71), and the average target price of $1,276.96 implies 11.2% upside from the current price of $1,148.84. Major firms like Citigroup, Morgan Stanley, and JP Morgan have reaffirmed Buy/Overweight ratings.
Bearish
- Concentration Risk in GLP-1: Weight-loss and diabetes drugs now account for nearly two-thirds of revenue, creating significant concentration risk. Any setback in this franchise—whether from competition, pricing pressure, or safety issues—would disproportionately impact the company.
- High Valuation Premium: Trailing PE of 46.7x and forward PE of 25.5x are elevated relative to the broader market. The stock trades at 14.8x sales and 36.4x book value, pricing in perfection and leaving little room for error.
- Competitive Threats from Oral Wegovy: The launch of oral Wegovy by Novo Nordisk poses a direct challenge to Lilly's GLP-1 dominance. If oral Wegovy gains traction, it could erode market share and pressure pricing, impacting Lilly's growth trajectory.
- Recent Price Volatility: The stock experienced a max drawdown of -23.31% over the past year, and the current price is 8.1% below the 52-week high of $1,249.45. This volatility reflects sensitivity to news and sentiment, which could lead to further downside.
LLY Technical Analysis
Eli Lilly's stock is in a strong long-term uptrend, with a 1-year price change of +55.2%, significantly outperforming the S&P 500's +18.2% over the same period. The current price of $1,148.84 sits at 92% of its 52-week range (high $1,249.45, low $623.78), indicating the stock is trading near its highs, reflecting robust momentum but also potential overextension. The 52-week low of $623.78 represents a massive 84% upside from current levels, underscoring the stock's remarkable appreciation over the past year.
Beta
0.51
0.51x market volatility
Max Drawdown
-23.3%
Largest decline past year
52-Week Range
$624-$1249
Price range past year
Annual Return
+55.2%
Cumulative gain past year
| Period | LLY Return | S&P 500 |
|---|---|---|
| 1m | -3.6% | +0.3% |
| 3m | +19.3% | +4.0% |
| 6m | +10.8% | +8.3% |
| 1y | +55.2% | +20.2% |
| ytd | +6.3% | +9.6% |
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LLY Fundamental Analysis
Eli Lilly's revenue growth is exceptional, with Q1 2026 revenue of $19.80 billion, up 55.5% year-over-year, accelerating from 35.5% growth in Q1 2025. The company's revenue trajectory has been consistently strong, with sequential increases from $12.73 billion in Q1 2025 to $19.80 billion in Q1 2026, driven primarily by its cardiometabolic portfolio (Mounjaro, Zepbound) which generated $15.76 billion in the latest quarter. This explosive growth is fueled by soaring demand for GLP-1 therapies, positioning Lilly as a market leader in a rapidly expanding category.
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 of $7.40 billion in Q1 2026, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 46.7x, while the forward PE is 25.5x, implying the market expects significant earnings growth, with the gap suggesting a 45% expected increase in earnings over the next year. This is supported by a PEG ratio of 0.49, which indicates that the stock may be undervalued relative to its growth rate, as a PEG below 1 typically signals attractive value.
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 & Operational Risks: Eli Lilly's financial health is robust, with positive net income of $7.40B in Q1 2026 and strong free cash flow of $13.58B TTM. However, the company carries a debt-to-equity ratio of 1.60, indicating significant leverage. While interest coverage is adequate, rising interest rates could increase financing costs. The company's reliance on the GLP-1 franchise for nearly two-thirds of revenue creates concentration risk; any disruption in this segment—whether from supply chain issues, safety concerns, or competitive pricing—could severely impact earnings. Additionally, the high operating margin of 45.6% may attract regulatory scrutiny, potentially leading to price controls or increased competition.
FAQ
The key risks include concentration risk in the GLP-1 franchise, which accounts for nearly two-thirds of revenue, making the company vulnerable to competitive threats like oral Wegovy. Valuation risk is also significant, as the stock trades at a premium PE of 46.7x, which could compress if growth decelerates. Regulatory risks include potential drug pricing reforms and safety concerns. Additionally, the high debt-to-equity ratio of 1.60 could strain finances if interest rates rise. The most severe risk is a major setback in the GLP-1 market, which could lead to a decline of up to 45% to the 52-week low.
The 12-month forecast is bullish, with a base case probability of 50% targeting a range of $1,150-$1,300, aligning with the average analyst target of $1,276.96. The bull case, with a 30% probability, targets $1,300-$1,600, driven by continued GLP-1 dominance and pipeline successes. The bear case, with a 20% probability, targets $850-$1,000, reflecting competitive and regulatory risks. The most likely scenario is the base case, assuming revenue growth remains above 40% and no major setbacks. Investors should monitor quarterly earnings and competitive developments to adjust expectations.
Based on the PEG ratio of 0.49, LLY appears undervalued relative to its growth rate, as a PEG below 1 typically signals attractive value. However, the trailing PE of 46.7x and forward PE of 25.5x are higher than the market average, indicating a premium valuation. The stock trades at 14.8x sales and 36.4x book value, which are elevated. The market is pricing in significant future earnings growth, and if that growth materializes, the stock could be fairly valued. Compared to peers, LLY's valuation is justified by its superior growth and profitability, but it leaves little room for error.
LLY is a good buy for growth-oriented investors with a long-term horizon, given its exceptional revenue growth of 55.5% YoY and a PEG ratio of 0.49, which suggests the stock is undervalued relative to its growth. The analyst consensus is Buy with an average target price of $1,276.96, implying 11.2% upside. However, the stock carries concentration risk in the GLP-1 franchise and trades at a premium valuation, so investors should be prepared for volatility. It is a good buy for those who believe in the long-term growth of the obesity and diabetes market and can tolerate potential drawdowns of up to 20%.
LLY is more suitable for long-term investment, given its high growth stage and the multi-year expansion of the GLP-1 market. The stock has a beta of 0.506, indicating lower volatility than the market, but it has experienced drawdowns of over 20% in the past year, making it unsuitable for short-term trading. The company's strong earnings visibility, with forward PE of 25.5x, supports a long-term holding period of at least 3-5 years to fully capture the growth potential. The low dividend yield of 0.56% means income investors should look elsewhere. For growth investors, LLY offers a compelling long-term opportunity.