Key Stats for Lilly Stock
- Past-Week Performance: -3%
- 52-Week Range: $624 to $1134
- Valuation Model Target Price: $1,839
- Implied Upside: 66% over 2.9 years
What Happened to LLY Stock?
Eli Lilly and Company (LLY) shares fell about 3% last week, trading within a relatively narrow range after consolidating following earlier gains tied to its obesity franchise.
During late January and early February, Reuters coverage centered on multiple Lilly announcements, including new research collaborations, manufacturing expansion plans, and broader analysis of the obesity drug market.
Eli Lilly and Co highlighted several strategic initiatives, including research collaborations with Seamless Therapeutics and Repertoire Immune Medicines and continued investment in U.S. manufacturing capacity for next-generation weight-loss treatments.
Eli Lilly also reiterated its long-term focus on scaling supply and innovation, outlining multi-billion-dollar manufacturing investments without revising near-term revenue guidance or financial outlook.
Market participants appeared to focus on analyst reassessments of the long-term obesity drug market, where price pressure and competition prompted lower peak market forecasts despite strong expected volume growth.
Additional disclosures included Lilly’s indication of interest in purchasing up to 4.9% of Veradermics’ post-IPO shares, which represented optional pipeline exposure rather than a change in capital allocation strategy.
Overall, trading reflected a balance between long-term expansion plans and near-term market reassessment, while Lilly’s communicated strategy, guidance framework, and growth priorities remained unchanged.
Is LLY Stock Fairly Valued Right Now?
Under the valuation model shown, the stock is modeled using:
- Revenue Growth: 16.8%
- Operating Margins: 48.9%
- Exit P/E Multiple: 32x
Is LLY Stock Fairly Valued Right Now?
Eli Lilly’s valuation model reflects a business that has already scaled materially, with revenue growth moderating to a mid-teens trajectory as the company moves deeper into a large, established base.
The model assumes revenue compounds at roughly 17% through 2028, slowing from the GLP-1 surge while underlying treatment volumes continue to grow.
Profitability in the model remains structurally strong, with operating margins expanding toward the high-40% range as manufacturing scale and product mix support sustained leverage.
Below the margin line, the model assumes continued operating leverage rather than cost compression, with earnings growth driven by scale across obesity, diabetes, and pipeline assets.
Cash generation underpins the valuation logic, as Lilly’s mature portfolio supports durable free cash flow that sustains reinvestment, capacity expansion, and shareholder returns.
LLY stock model treats growth normalization as expected, reflecting market saturation and pricing pressure already embedded in sector forecasts.
Under these assumptions, the model implies a materially higher equity value over a multi-year horizon, anchored in execution rather than multiple expansion.
Accordingly, Eli Lilly stock appears undervalued, as the current share price discounts a faster deceleration in growth and margin durability than the operating path embedded in the model.
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