Key Stats for LLY Stock
- Past week’s performance: -4%
- 52-week range: $580 to $1,250
- Valuation model target price: $1,755
- Implied upside: 68.8% over 2.9 years
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What Happened?
Shares of Eli Lilly (LLY) fell about 4% last week, with the stock closing near $1,040 after a volatile post-earnings reaction.
The move followed Lilly’s Q4 earnings report on February 4, where the company reported adjusted EPS of $7.54, beating consensus estimates by 9.1%. Revenue of $19.3 billion also exceeded expectations by 7.5% and rose 42.6% year over year.
Despite the strong beat, the stock declined because expectations were already elevated after a sharp rally into earnings, and some investors focused on near-term uncertainty around obesity drug competition.
During the week, multiple Reuters reports highlighted increased scrutiny around compounded versions of Wegovy sold by telehealth platforms such as Hims & Hers, which drew attention to regulatory risks and pricing dynamics across the GLP-1 market.
Lilly also disclosed it is building a $1.5 billion inventory stockpile of its weight-loss pill ahead of an FDA decision, signaling confidence in future demand but also highlighting the scale of capital investment required.
At the same time, hedge fund positioning data showed increased bets against Hims & Hers ahead of the Wegovy copy dispute, which indirectly kept investor focus on competitive headlines rather than Lilly’s earnings strength.
Overall, the pullback reflects profit-taking and headline sensitivity rather than a deterioration in Lilly’s operating performance.
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Is LLY Stock Undervalued?
Under the valuation model assumptions realized through 2028, the stock is modeled using:
- Revenue growth (CAGR): 17.9%
- Operating margins: 48.9%
- Exit P/E multiple: 30.3x
Based on these inputs, the model estimates a target price of $1,755.21, implying 68.8% total upside from the current share price and a 19.9% annualized return over the next 2.9 years.
Execution remains the primary driver behind these assumptions, especially volume growth from Mounjaro and Zepbound.
Revenue reached $65.2 billion over the last twelve months, up 44.7% year over year, driven by diabetes and obesity drug demand.
Operating income rose 74.3% year over year, and operating margins expanded to 45.6%, reflecting strong operating leverage despite rising R&D spending.
Free cash flow totaled $16.8 billion over the past year, even as Lilly invested heavily in manufacturing capacity and inventory buildouts.
Looking into 2026, analysts expect revenue to rise to about $80 billion and normalized EPS to reach roughly $34, supported by continued GLP-1 penetration and oncology growth.
While regulatory headlines and competition can drive short-term volatility, Lilly’s financial results continue to show accelerating earnings power and expanding margins.
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