2 models fit Eli Lilly and Company Common Stock and they disagree: 0 of 2 land within 15% of the average. The price is above every model.
Two or more of our models back this value.
Large premium(i)Silver69
Valued as a growth company: Discounted cash flow, P/E comparison, and EV/EBITDA comparison.
ACCE opinionEli Lilly and Company Common Stock (LLY)
Fair value (2 models)
$607
ACCE price target
$1250
Rating
Overvalued
Horizon
12 months
Fair value published on 21 Oct 2026, 12:04 CEST; previously $584 since 17 Oct 2026, 00:00 CEST.
ACCE price target published on 9 Oct 2026, 00:00 CEST.
Rating published on 21 Oct 2026, 12:04 CEST.
Price used: $1273 at the close on 23 Oct 2026, 22:00 CEST.
Models: P/E comparison and EV/EBITDA comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
109.8% above
-52.3% to fair value
ACCE score
75
out of 100
Analysts
84% buy
31 covering
P/E
42.7x
forward 24.4x
1-year return
+55.1%
Dividend yield
0.51%
Eli Lilly and Company Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Eli Lilly makes tirzepatide, sold as Mounjaro for diabetes and Zepbound for obesity, along with a large oncology and immunology franchise, and it is the dominant incretin drug maker in the market. Its moat rests on a first-mover position in dual GIP and GLP-1 agonism, a manufacturing footprint that has been expanding through new US and overseas plants, and pricing power that shows up in an 83.4% gross margin and a 54.2% operating margin. Revenue growth of 47.7% is the number to focus on, since it signals that obesity demand is converting into sales at scale rather than remaining a pipeline story. The stock trades at 39.2 times trailing earnings but 24.4 times forward, so the market is pricing in a steep earnings ramp, and the next readouts from the obesity and Alzheimer's programs will test whether that ramp is justified. Competition from Novo Nordisk's semaglutide and newer entrants is the main risk to share and pricing, which makes the forward multiple worth stress-testing before sizing a position.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
high
Valuation disconnect with growth
Forward P/E of 24.8 is reasonable, but P/S of 13.2 and EV/EBITDA of 26.1 are elevated. Revenue growth of 47.7% YoY must sustain to justify multiples; deceleration risk is material.
high
Leverage elevated for pharma
Debt/Equity of 1.62 is high for the sector. While FCF of $11.1B is strong, debt service capacity depends on sustained earnings growth and cash generation.
moderate
Insider selling without offsetting buys
Last 10 disclosures show $7.64M in sales and $0 in buys. Small absolute amount, but directional signal warrants monitoring.
AI research notes
AI-assisted·How I use AIWritten Oct 11, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue grew 47.7% year over year with a 31.7% five-year average, showing sustained momentum beyond a single cycle.
Net margin of 33.5% and ROE of 102.3% demonstrate exceptional profitability and capital efficiency.
Free cash flow of 11.1 billion dollars funds dividends and buybacks while 83% of analysts rate the stock Buy or Strong Buy.
Why it could disappoint
Consensus fair value of 573.02 dollars is 51.4% below the current price of 1179.27 dollars across all three valuation models.
Trailing P/E of 39.6x is steep, and the stock price implies only 9.1% perpetual cash flow growth against a 5.2% risk-free rate.
Debt to equity of 1.62 combined with heavy revenue concentration in tirzepatide products leaves little room for execution errors.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Oct 29, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
INVESTOR
Where LLY's valuation models land
Price
$1273.46
Model fair value
$607
Model range
$359 to $855
Fair value $607
Price $1273
The price is above the whole model range.
Model
Fair value
Upside
Discounted cash flow
EV/EBITDA comparison
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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