Eli Lilly and Company
Decision brief
Eli Lilly closed at $1,220.66 on July 28, 2026, up 1.9% from the prior session and 2.3% below the 52-week high of $1,249.45. The macroeconomic backdrop is neutral with at 18.21 and the 10-year yield at 4.60%. Fundamentally, the company remains a GLP-1 powerhouse with 55.5% revenue growth and 170% earnings growth, trading at a forward of 27.1x ( 1.67) that remains attractive relative to growth. However, current quarter estimates have been sharply reduced from $8.09 to $6.55 over 90 days, signaling near-term headwinds likely from competitive pressure and conservative guidance. On the positive side, recent retatrutide Phase 3 data showed 22.6% weight loss and the company plans to file for approval in early 2027, extending the pipeline runway. Multiple analyst target increases (Citigroup to $1,600, UBS to $1,425, Bernstein to $1,385) underpin bullish sentiment for 2027+. Technically, the stock is above ($1,134) and ($1,006) with at 61.3 and histogram improving from -10.1 to -0.95, signaling fading bearish momentum. Volume was above average on July 28, confirming buying interest. The next earnings release on August 5, 2026, is 7 days away and represents a high-impact catalytic event; estimate cuts raise the bar for a beat, but management has a history of conservative guidance. Additionally, Novo Nordisk's lawsuit over GLP-1 advertising adds legal uncertainty. The long-term thesis remains intact on strong fundamentals and pipeline depth, but near-term estimate revisions, legal risk, and event risk warrant patience. The overall rating is BUY with a 1-month HOLD given the event risk and mixed technicals.
Decision
$1220.66
Recommendation score
56%Confidence
50%Outlook by horizon
1M
Near
6M
Mid
1Y
Long
Primary catalyst
The next earnings release on August 5, 2026, will likely be the highest-impact catalyst, providing updates on Zepbound/Mounjaro sales, Foundayo trends, and pipeline progress. The recent estimate cuts increase the probability of a negative surprise, but the stock could rally if results beat significantly.
Price rail
$1130.00
$1160.00 - $1180.00
$1300.00 - $1500.00
Risk / reward
2.7x
Downside to stop
-7.4%
Upside to exit
+22.9%
Position sizing
Reduce to 70% of normal Core Growth position (2-3% of portfolio) due to upcoming earnings (7 days) and recent estimate cuts. The stock has bounced off support and is showing positive technical momentum, but event risk remains elevated. A pullback to $1,160-$1,180 would provide a better risk-reward entry.
Why It Works
What Breaks It
Current quarter estimates have been slashed by over 19% in 90 days, suggesting that competitive pressure from Novo's oral Wegovy or slowing Zepbound sales momentum could lead to a significant Q2 miss. The technical setup, while improving, is still fragile with negative until a cross. Foundayo's slow launch raises concerns about LLY's oral GLP-1 competitiveness, potentially allowing Novo to capture more market share. The Novo lawsuit could force LLY to alter advertising, weakening its marketing edge. Drug pricing regulation in Europe and potential US reforms could compress margins. The elevated and rising 10Y yield also pressure growth multiples.
A daily close below ($1,134) after a confirmed breakdown would break the intermediate trend and signal a deeper correction. Additionally, a Q2 earnings miss with lower guidance would fundamentally invalidate the near-term thesis.
Watch Next
Decision inputs
6 signalsFundamental
4.6%
Upside to analyst mean target
LLY trades at a forward of 27.1x, which is attractive given 170% earnings growth, yielding a of 1.67. of 15.1x is elevated but justified by 82.8% gross margins and accelerating revenue growth. of 30.5x reflects the growth premium. FCF yield is low at 0.84%, but FCF is growing rapidly. Overall, the stock is fairly valued on a growth-adjusted basis and offers reasonable upside, especially with recent analyst target increases.
Technical
Bullish
Trend quality
Price ($1,221) is 21.4% above ($1,006) and 7.6% above ($1,134), confirming a bullish long-term trend. The / relationship remains golden (crossed in Jan 2024) and widening. The stock pulled back from the July 7 high of $1,249 to $1,141 in mid-July but has since rebounded, currently trading just above ($1,189). Overall trend structure is bullish with a short-term consolidation resolving higher.
Earnings
7d
Decelerating
Q1 2026 of $8.55 beat consensus of $6.79 by 25.9%, driven by Zepbound margin expansion and volume surprise. Shares rallied on the beat.
News
Mixed-Bullish
Headline tone
The next earnings release on August 5, 2026, will likely be the highest-impact catalyst, providing updates on Zepbound/Mounjaro sales, Foundayo trends, and pipeline progress. The recent estimate cuts increase the probability of a negative surprise, but the stock could rally if results beat significantly.
Macro
Neutral
4.60% 10Y / 18.2 VIX
Elevated 10-year yield at 4.60% continues to pressure growth multiples, but LLY's strong earnings trajectory (170% growth) and defensive growth profile partly insulate it. at 18.21 signals a cautious environment suitable for standard position sizing.
Stability
Balanced Growth
Core Growth
Eli Lilly's industry-leading profitability (82.8% gross margin, 107% ) and robust revenue growth (55.5%) driven by its GLP-1 franchise justify its premium valuation. The balance sheet is leveraged ( 139%) but operating cash flow of $20.5B provides adequate coverage. Valuation is reasonable with a forward of 27.1x and of 1.67. The stock is best held as a Core Growth name in a diversified portfolio, expecting drawdowns of 10-15% during corrections. Thesis durability remains high given pipeline depth and market leadership, though near-term estimate revisions, legal challenges, and event risk warrant patience.
Mean Target
$1276.96
High / Low
$850 / $1600
Median Target
$1300.00
Consensus range
$850 - $1600
Consensus
The mean target of $1,277 implies 4.6% upside from current price of $1,221. The range is wide ($850-$1,600), but recent upward revisions (Citigroup to $1,600, UBS to $1,425) signal strong buy-side conviction. The consensus is heavily bullish with 22 buy/strong buy ratings out of 29, 5 holds, and 2 sells.
Insider Signal
Neutral
Net Bias
No recent activity
Insider Own.
0.2%
Institutional Own.
85.1%
Interpretation
The lack of any significant insider transactions provides no strong signal; insider activity is neutral.
Notable activity
Only small director stock awards (6, 1000, 18 shares) in the last 3 months, no open-market purchases or sales by executives.
Industry
Sentiment
23
Tracked names
5
Grouping
industry
Drug Manufacturers - General industry is currently Mixed-Bullish with an average recommendation score near 64. positioning is broadly steady, and leadership is concentrated in JNJ, ABBV, NVO.
Rotation Drivers
Themes
Score: 45
The GLP-1 market for obesity and diabetes continues to expand, with projections exceeding $120B by 2035. LLY leads with Zepbound and injectables, but the oral pill Foundayo is off to a slower start than expected, trailing Novo Nordisk's Wegovy pill significantly in both the US (11% vs 89% prescriptions) and Europe. The theme remains structurally bullish, but near-term competitive dynamics are shifting with Novo's lawsuit challenging LLY's advertising. LLY's long-term pipeline (retatrutide, eloralintide) and manufacturing scale provide a durable edge.
Recent IQVIA data shows Wegovy pill with 89% US market share vs Foundayo's 11%, and Novo's lawsuit over misleading ads adds near-term legal overhang.
Market Cap
$1.09T
P/E (TTM)
43.4
Forward P/E
27.1
Revenue Growth
55.5%
ROE
107.5%
Beta
0.51
Full Metric Set
17 additional stats
Valuation Stack
Multiples and cash-flow framing.
Price / Sales
15.1
Price / Book
35.0
EV / EBITDA
30.5
Quality & Balance Sheet
Margins, leverage, and liquidity.
Gross Margin
82.8%
Operating Margin
49.4%
Debt / Equity
139.0
Current Ratio
1.50x
Quick Ratio
0.72x
Positioning & Range
Short interest and 52-week location.
Short % Float
1.2%
Short Ratio
3.34x
52W High
$1249.45
52W Low
$623.78
From 52W High
-2.3%
From 52W Low
95.7%
Company Classification
Sector and industry context.
Sector
Healthcare
Industry
Drug Manufacturers - General
Additional Signals
Free Cash Flow
$9156599808.00
Business Quality
Capital Allocation
Estimate Revisions
Revenue Growth
55.5%
Insider Activity
HEDLEY MARY LYNNE
Director
12
$10k
SULZBERGER GABRIELLE
Director
6
$5k
LUCIANO JUAN R
Director
19
$15k
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
220,000
$204.3M
News Catalysts
Jul 28, 2026
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Incyte tops Q2 earnings and revenue estimates as Jakafi and Opzelura sales surged, prompting the company to raise its 2026 revenue outlook.
Jul 28, 2026
Here's How LLY's Non-GLP-1 Portfolio Is Poised Ahead of Q2 Earnings
Eli Lilly's expanding oncology and newer medicine portfolio is set to play a pivotal role in its Q2 earnings alongside its blockbuster GLP-1 franchise.
Jul 27, 2026
3 Quality Compounders to Own for Decades
A quality compounder is a business that not only sports durable competitive advantages but also builds on its success by consistently reinvesting its profits at high returns.
Jul 27, 2026
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