LLY Research Update — August 28, 2026
Updated Thesis
Eli Lilly is a global pharmaceutical leader with a strong portfolio in diabetes, oncology, immunology, and neuroscience, but its recent growth is heavily driven by the incretin franchise, Mounjaro and Zepbound, which generated $8.662 billion and $4.160 billion in Q1 2026, respectively. The company's business quality is high, evidenced by a TTM gross margin of 84.0%, operating margin of 43.9%, and net margin of 33.5%, along with a ROE of 92.6%. Despite a 47.7% revenue growth and 25.3% earnings growth in the most recent quarter, the stock trades at a P/E of 39.27 and P/S of 13.9, which is in line with its historical valuation regime.
The investment grade as of this refresh is B — solid business quality. A-tier business, fair valuation with 18% upside to fair value.
Grade Change
In this research cycle, the investment grade for Eli Lilly and Company moved from A to B. A-tier business, fair valuation with 18% upside to fair value.
Key Metrics at a Glance
- Revenue growth: +47.7% year over year
- Net margin: 33.5%
- Fair value upside: +18.0% to our estimate of $1387
Current price: $1175.49
These figures reflect our most recent data pull and are one input into a multi-factor valuation framework.
Our 12–18 Month Outlook
Quality companies held over a multi-year horizon benefit from compounding fundamentals and the patience to ride through short-term volatility. Eli Lilly and Company remains in our covered universe with a solid-quality assessment. We update research when material data changes — earnings revisions, management shifts, or regime changes in valuation — not on every price fluctuation.
Long-term accumulation of quality businesses at fair or better prices is the core of the Patient Accumulator approach. Research updates like this one inform whether to add, hold, or wait for a better zone — not whether to react to short-term price moves.
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