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Eli Lilly and Co LLY

Morningstar Rating
$588.27 −0.98 (0.17%)
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Company Report

Eli Lilly: Increasing GLP-1 Market Share Assumptions, Leading to a Fair Value Estimate Increase

We are raising our Eli Lilly fair value estimate to $450 from $368 after updating our long-term GLP-1 model to include wider use of and greater adherence to these cardiometabolic drugs. We have increased our assumptions for overall biopharma GLP-1 sales in 2031 to nearly $170 billion across diabetes ($50 billion), obesity ($85 billion), and overweight ($35 billion). This includes nearly $140 billion in sales from big biopharma firms Novo Nordisk ($65 billion), Eli Lilly ($65 billion), Pfizer ($4 billion), and Amgen ($3 billion), which is higher than our prior estimate of just over $100 billion. Overall, we assume a greater proportion of patients will receive (and stay compliant with) treatment, including overweight (lower BMI) patients, albeit with more competition and at a lower price. We now think more than 25% of obese Americans and 15% of overweight Americans will receive treatment in 10 years, with the vast majority receiving branded GLP-1 therapies. We think U.S. prices could fall substantially as volumes increase (in line with payer contracts) and as new entrants launch (beginning in 2026-27), with average net prices falling from roughly $8,000 annually to $3,000 in 10 years.

Price vs Fair Value

LLY is trading at a 31% premium.
Price
$588.29
Fair Value
$495.00
Uncertainty
High
1-Star Price
$531.30
5-Star Price
$655.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Lilly is developing a new Alzheimer’s drug (donanemab) that could become a major blockbuster, especially because the FDA appears to have a lower threshold for approval for this disease.

Bears

The risks to success for Alzheimer’s drug donanemab remain high both in clinical development and insurance coverage.

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News

Trading Information

Previous Close Price
$589.25
Day Range
$577.61588.87
52-Week Range
$302.14629.97
Bid/Ask
$584.00 / $588.00
Market Cap
$558.45 Bil
Volume/Avg
2.1 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
73.62
Price/Sales
16.57
Dividend Yield
0.77%
Dividend Yield (Forward)
0.77%
Total Yield
0.90%

Company Profile

Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly's key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for diabetes; and Taltz and Olumiant for immunology.
Sector
Healthcare
Industry
Drug Manufacturers - General
Stock Style Box
Large Growth
Total Number of Employees
39,000

Competitors

Valuation

Metric
LLY
NVO
BMY
Price/Earnings (Normalized)
73.6240.446.61
Price/Book Value
49.7732.873.52
Price/Sales
16.5714.202.34
Price/Cash Flow
77.5927.866.53
Price/Earnings
LLY
NVO
BMY

Financial Strength

Metric
LLY
NVO
BMY
Quick Ratio
0.580.630.99
Current Ratio
1.050.821.18
Interest Coverage
14.878.54
Quick Ratio
LLY
NVO
BMY

Profitability

Metric
LLY
NVO
BMY
Return on Assets (Normalized)
10.19%28.64%16.88%
Return on Equity (Normalized)
49.42%88.92%51.13%
Return on Invested Capital (Normalized)
19.29%63.66%24.06%
Return on Assets
LLY
NVO
BMY

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PFE
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AMGN
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SNY
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