Eli Lilly (LLY) is back in focus after releasing 52 week data from its TOGETHER psoriasis and psoriatic arthritis trials, which tested Taltz with obesity drug Zepbound versus Taltz alone.
Eli Lilly’s share price has eased recently, with a 7 day share price return of 2.15% and a 30 day share price return of 1.75%. However, the 1 year total shareholder return of 59.05% and the 5 year total shareholder return of about 5x suggest that momentum over longer periods remains strong.
Capture Eli Lilly's momentum in obesity, diabetes and immunology, then size up similar opportunities with our curated list of 19 high quality undiscovered gemsEli Lilly now trades near US$1,150 after a long run and a recent pause. Is this the moment to accept the current price, or does it make more sense to wait for a clearer margin of safety before considering any additional purchase?
Most Popular Narrative: 22.2% Undervalued
The most followed valuation narrative on Eli Lilly pegs fair value around $1,477, which is above the last close of $1,149.36. That gap is built on an aggressive but internally consistent view of future earnings power.
At 30 times those earnings, the 2031 market cap reaches approximately $1.44 to $1.5 trillion. Divided across 873 million shares, that produces a 2031 share price of $1,650 to $1,720. Discounted back to today at 7.5%, fair value lands between $1,150 and $1,200. Against a current price of $907, that is a margin of safety of 27 to 32%.
The narrative leans on robust revenue expansion, firm profit margins and a rich future earnings multiple. It builds a detailed roadmap from those building blocks to that higher fair value range. It also examines which assumptions carry the most weight and how sensitive the outcome is to even small tweaks in those inputs.
Result: Fair Value of $1,477.03 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this Eli Lilly story can change quickly if obesity drug pricing pressure intensifies further or if key late stage trial results fail to match current expectations.
Find out about the key risks to this Eli Lilly narrative.
Next Steps
Given the mixed sentiment around Eli Lilly, now is a good time to look through the numbers and form your own view using the 3 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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