Key Takeaways:
- GLP-1 Dominance: Lilly holds nearly 60% of U.S. incretin prescriptions with Zepbound and Mounjaro, gaining share for five consecutive quarters.
- Price Projection: Based on current momentum, the stock could reach $1,414 by December 2027.
- Potential Gains: This target implies a total return of 36% from the current price of $1,038.
- Annual Return: Investors could see roughly 17% growth per year over the next 2 years.
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Eli Lilly (LLY) isn’t just winning the GLP-1 race—it’s redefining the entire cardiometabolic health market. With Q3 revenue surging 54% year-over-year and key products more than doubling their contribution, the company is executing on multiple fronts simultaneously.
Orforglipron, Lilly’s once-daily oral GLP-1, completed its obesity clinical package with positive results across six Phase III trials.
The company will begin global regulatory submissions imminently and expects to launch in the U.S. next year. Retatrutide, the GIP/GLP-1/glucagon triple agonist, expects results from up to six Phase III studies by the end of 2026.
Despite this momentum, LLY stock is trading at $1,038, up 37% over the past year but still offering upside for investors who understand the full scope of Lilly’s pipeline.
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What the Model Says for Eli Lilly Stock
We analyzed Eli Lilly through the lens of its transformation from a diabetes-focused company into a cardiometabolic health powerhouse.
With the oral GLP-1 orforglipron launching next year and the triple agonist retatrutide reading out multiple studies in 2026, Lilly is building a multi-tiered portfolio that can address different patient populations across the weight spectrum.
Using a forecast of 26% annual revenue growth and 46.1% operating margins, our model projects the stock will rise to $1,414 within 2 years. This assumes a 28x Price-to-Earnings (P/E) multiple.
That represents compression from Lilly’s current P/E of 32.9x. As manufacturing investments scale and the company absorbs integration costs from new facilities, some multiple compression is reasonable. The real value comes from sustained GLP-1 market share gains and successful orforglipron launch execution.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for LLY stock:
1. Revenue Growth: 26% Eli Lilly’s revenue engine is firing across multiple therapeutic areas, but GLP-1 medicines are driving the majority of growth.
U.S. Incretin Market Dominance: Lilly holds nearly 60% of U.S. incretin prescriptions. In Q3, approximately 2 out of every 3 new prescriptions in the incretin market were for a Lilly medicine. Zepbound prescriptions tripled year-over-year and completed Q3 with 71% share of new prescriptions in the branded anti-obesity market. Mounjaro’s total prescriptions grew by more than 60% while gaining 4 percentage points of market share over the previous quarter.
International Acceleration: Mounjaro launched in 55 countries, with a strong global reception. Outside the U.S., approximately 75% of Mounjaro revenue comes from people with obesity paying out-of-pocket, demonstrating high clinical need and willingness to pay. Revenue in Europe increased by over 100% in constant currency in Q3.
Orforglipron Launch Opportunity: With data from over 8,000 participants across six completed Phase III trials, orforglipron has delivered efficacy, safety, and tolerability comparable to injectable GLP-1s. The ACHIEVE-3 trial showed orforglipron superiority versus oral semaglutide on both A1c reduction and weight loss. Patients lost nearly 20 pounds on the highest dose.
2. Operating margins: 46.1%
Lilly’s margin profile shows significant expansion potential despite heavy manufacturing investments.
Q3 Performance Margin: Non-GAAP performance margin (gross margin less R&D and marketing expenses) reached 48.3%, up over 8 percentage points from Q3 2024. This was driven by revenue growth outpacing expense increases and a favorable product mix.
Manufacturing Scale: The company announced plans for two new U.S. facilities and the expansion of a Puerto Rico facility. The new Virginia facility will support bioconjugate and monoclonal antibody portfolios. The Texas facility and Puerto Rico expansion will support small molecule production, including orforglipron.
Gross Margin Improvement: Gross margin as a percentage of revenue was 83.6% in Q3, up 1.4 percentage points over last year. This improvement stemmed from a favorable product mix, as higher-margin GLP-1 medicines accounted for a larger revenue share.
3. Exit P/E Multiple: 28x
The market currently values Eli Lilly at 32.9x earnings. We chose 28x for our exit multiple to stay conservative.
Below Recent Average: Eli Lilly’s P/E averaged 39.6x over 5 years and 29.6x over 10 years. The current elevated multiple reflects investor enthusiasm for the GLP-1 market opportunity, but some compression is likely as the market matures.
Quality Premium Justified: Eli Lilly deserves a premium to the market average due to its pipeline depth (16 new Phase III programs since the start of 2024), manufacturing scale investments, and first-mover advantages in oral GLP-1s and triple agonist mechanisms.
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What Happens If Things Go Better or Worse?
Pharmaceutical launches carry regulatory and competitive risk. Here is how Eli Lilly stock might perform in different scenarios through 2027:
- Low Case: If revenue growth slows to 16.5% and margins compress to 40.2%, the stock still offers an 9.8% annual return.
- Mid Case: With 18.3% growth and 42.9% margins (our base assumptions), we expect an annual return of 17%.
- High Case: If orforglipron captures market share faster and Lilly maintains 45.1% margins while growing at 20.1%, returns could hit 24.5% annually.
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The range reflects different orforglipron adoption curves and competitive dynamics. In the low case, oral semaglutide proves more competitive than expected, or pricing pressure intensifies across the GLP-1 class.
In the high case, orforglipron’s scalable manufacturing and no-refrigeration profile drive rapid global adoption, while retatrutide establishes a premium position for high-BMI patients requiring maximum efficacy.
How Much Upside Does Eli Lilly Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
