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Key Takeaways:
- Eli Lilly is driving the obesity and diabetes treatment revolution through its breakthrough incretin therapies and comprehensive pipeline of innovative medicines across multiple therapeutic areas.
- LLY stock could reasonably reach $1,076/share by the end of 2027, based on our valuation assumptions.
- This implies a total return of 68% from today’s price of $641/share, with an annualized return of 24.1% over the next 2.4 years.
Eli Lilly (LLY) has transformed from a traditional pharmaceutical company into the dominant force in the massive obesity and diabetes markets.
It serves millions of patients globally through its revolutionary tirzepatide molecule (Mounjaro and Zepbound) and expanding pipeline of next-generation treatments, including the first oral GLP-1 therapy.
The healthcare giant combines industry-leading manufacturing scale with direct-to-consumer capabilities through LillyDirect, creating significant barriers to entry in high-growth therapeutic areas.
LLY stock benefits from its market-leading position in the $100+ billion obesity market, with Zepbound and Mounjaro achieving record-breaking uptake.
The breakthrough oral GLP-1 therapy orforglipron is expanding the addressable patient population. Meanwhile, a robust pipeline including retatrutide and multiple indication expansions could drive decades of growth.
With strategic initiatives including massive manufacturing capacity expansion, producing 1.6x more incretin doses in H1 2025, Eli Lilly continues to strengthen its innovation leadership.
Additional catalysts include regulatory submissions for orforglipron by year-end 2025, cardiovascular indication approvals for tirzepatide, and potential game-changing treatments for Alzheimer’s disease with Kisunla.
With exceptional Q2 results showing 38% revenue growth to $15.56 billion and raised full-year guidance to $60-62 billion, LLY stock maintains its position as the fastest-growing large-cap pharmaceutical company.
Here’s why LLY stock could return 24% annually through 2027 as it scales tirzepatide toward becoming the best-selling drug in the industry. Eli Lilly is simultaneously launching breakthrough therapies across multiple billion-dollar markets.
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What the Model Says for LLY Stock
We analyzed the upside potential for LLY stock using valuation assumptions based on the company’s strong growth trajectory and market-leading positions.
Analysts see an exceptional opportunity ahead for Eli Lilly, given its dominance in the obesity market and successful pipeline execution across multiple therapeutic areas.
The company’s manufacturing scale advantages and ability to expand into new patient populations with oral and next-generation therapies further enhance its prospects.
Based on estimates of 23.3% annual revenue growth, 45.5% operating margins, and a normalized P/E valuation multiple, the model projects LLY stock could rise from $641/share to $1,076/share.
That would be a 68% total return, or a 24% annualized return over the next 2.4 years.
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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: 23.3%
Eli Lilly delivered exceptional Q2 results with revenue growth of 38% year-over-year. Growth was driven by explosive demand for Mounjaro ($5.2 billion, +68%) and Zepbound ($3.4 billion, +172%) as the company captured market leadership in incretin therapies.
LLY stock expects continued momentum from tirzepatide becoming “the best-selling drug in the industry in its third year.”
Additional drivers include expanding manufacturing capacity, producing at least 1.8x more incretin doses in H2 2025, orforglipron regulatory submissions launching the first oral GLP-1, and multiple pipeline catalysts, including cardiovascular indications and next-generation treatments.
We used a 23.3% forecast reflecting Eli Lilly’s unique position to benefit from the massive obesity market expansion.
Its differentiated drug portfolio, manufacturing advantages, and pipeline depth provide sustainable growth drivers across multiple high-value therapeutic areas.
2. Operating Margins: 45.4%
Eli Lilly demonstrates margin expansion potential with Q2 performance margins of 45.9%, up more than six percentage points year-over-year. This improvement was driven by revenue scale and favorable product mix.
Eli Lilly’s focus on high-value specialty medicines, particularly in obesity and diabetes, where patients see profound health benefits, enables premium pricing and substantial margin expansion. Manufacturing scale efficiencies and R&D leverage continue driving operational improvements.
3. Exit P/E Multiple: 23.8x
LLY stock trades at reasonable multiples for one of the world’s fastest-growing large pharmaceutical companies with dominant positions in massive addressable markets. It has proven innovation capabilities and a clear runway for sustained outperformance.
We maintain current valuation levels given Eli Lilly’s transformational market opportunity in obesity and successful pipeline execution across multiple therapeutic areas.
Long-term competitive advantages in manufacturing and patient access should drive decades of growth.
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What Happens If Things Go Better or Worse?
Different scenarios for Eli Lilly stock through 2030 show varied outcomes based on obesity market development and pipeline execution: (these are estimates, not guaranteed returns):
- Low Case: Slower obesity market growth and competitive pressure → 11% annual returns
- Mid Case: Successful orforglipron launch and market leadership → 17% annual returns
- High Case: Dominant obesity franchise and breakthrough pipeline success → 23%+ annual returns
Even in the conservative case, LLY stock offers exceptional returns supported by its unassailable position in growing obesity markets and diversified pipeline.
The upside scenario could deliver extraordinary performance if orforglipron captures oral therapy adoption and next-generation treatments like retatrutide achieve blockbuster status.
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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!
