Eli Lilly and Company (LLY) Stock Valuation — PE Analysis
Drug Manufacturers - General · NYSE
Current Price
$1210.38
PE Ratio (TTM)
42.9x
Intrinsic Value
$1,485.34
+18.5% margin of safety
COMPETITIVE MOAT
↑Dominant Drug Pipeline
Eli Lilly possesses a robust pipeline of innovative drugs, particularly in high-growth areas like obesity and Alzheimer's. This fuels future revenue and market leadership.
↑Strong Brand & Reputation
The company benefits from a long-standing reputation for developing life-changing medications. This fosters trust with physicians and patients, aiding market penetration.
↑Manufacturing Scale & Expertise
Eli Lilly's extensive manufacturing capabilities and expertise allow for efficient production of complex biologics. This is a significant barrier to entry for smaller competitors.
INVESTMENT RISKS
↓Clinical Trial Failures
Despite a strong pipeline, the inherent risk of clinical trial failures for new drug candidates remains. A significant setback could impact future growth prospects.
↓Patent Expirations
As key drug patents expire, Eli Lilly faces the threat of generic competition, which can significantly erode revenue streams for blockbuster drugs.
↓Intensifying Competition
The pharmaceutical industry is highly competitive, with rivals constantly developing new treatments. Eli Lilly must continuously innovate to maintain its market position.
Base case
LLY base case PE valuation
At a current price of $1,210.38, the base case PE valuation puts LLY fair value near $1,485.34 per share. That figure assumes 12.1% yearly earnings growth, a target PE multiple of 43x, and a 10% discount rate.
Intrinsic Value
$1,485.34
Margin of safety
+18.5%
Expected annual return
+4.2%
Base case assumptions: 12.1% annual earnings growth, 43x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LLY PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Eli Lilly and Company respond.
Open PE Calculator for LLYCompany Overview
Eli Lilly and Company is a prominent global pharmaceutical firm dedicated to the research, development, and commercialization of human medicines across the world. Its therapeutic offerings include a comprehensive suite of diabetes medications. This encompasses various insulin formulations like Basaglar, the Humalog family (e.g., Mix 75/25, U-100, U-200, Mix 50/50), insulin lispro products (including protamine and mix 75/25), and the Humulin line (e.g., 70/30, N, R, U-500). Furthermore, Eli Lilly provides specialized treatments for type 2 diabetes, such as Jardiance, Trajenta, and Trulicity. In oncology, Eli Lilly offers a robust portfolio targeting various cancers. These include Alimta for non-small cell lung cancer (NSCLC) and malignant pleural mesothelioma; Cyramza, indicated for metastatic gastric cancer, gastro-esophageal junction adenocarcinoma, metastatic NSCLC, metastatic colorectal cancer, and hepatocellular carcinoma; Erbitux for colorectal and various head and neck cancers; Retevmo, used in metastatic NSCLC, medullary thyroid, and other thyroid cancers; Tyvyt for relapsed or refractory classic Hodgkin's lymphoma and non-squamous NSCLC; and Verzenio, prescribed for HR+, HER2- metastatic breast cancer, node-positive, and early breast cancer. For autoimmune and inflammatory conditions, the company markets Olumiant for rheumatoid arthritis, and Taltz, which addresses plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondyloarthritis. Addressing neurological and pain management needs, Eli Lilly provides Cymbalta for depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, fibromyalgia, and chronic musculoskeletal pain. Emgality is available for migraine prevention and episodic cluster headaches, while Zyprexa treats schizophrenia, bipolar I disorder, and aids in bipolar maintenance. Other significant products include Bamlanivimab and etesevimab, along with Bebtelovimab, both developed for COVID-19. Cialis is offered for erectile dysfunction and benign prostatic hyperplasia, and Forteo is available for osteoporosis. Eli Lilly actively engages in strategic collaborations with numerous partners, including Incyte Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; AbCellera Biologics Inc.; Junshi Biosciences; Regor Therapeutics Group; Lycia Therapeutics, Inc.; Kumquat Biosciences Inc.; Entos Pharmaceuticals Inc.; and Foghorn Therapeutics Inc. Established in 1876, Eli Lilly and Company maintains its corporate headquarters in Indianapolis, Indiana.
Financial Metrics — LLY PE Stock Valuation Data
PE Ratio (TTM)
42.9x
PEG Ratio
0.33
Earnings Yield
2.33%
ROE (TTM)
101.3%
Revenue/Share (TTM)
$80.77
Dividend Yield
0.53%
Debt/Equity
1.39x
Frequently Asked Questions
What is the PE ratio of LLY?
The trailing twelve-month PE ratio of LLY reflects how much investors pay per dollar of Eli Lilly and Company's earnings. This metric is most useful when compared to Drug Manufacturers - General peers and the company's own historical range.
Is LLY overvalued based on PE ratio?
LLY's PE of 42.9x combined with a PEG ratio of 0.33 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Drug Manufacturers - General, a DCF analysis may be more appropriate.
How do I value LLY stock using PE ratio?
To value Eli Lilly and Company using PE: (1) Compare the current PE (42.9x) against the Drug Manufacturers - General median to assess relative pricing, (2) check the PEG ratio (0.33) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of LLY?
LLY's PEG ratio is 0.33, calculated by dividing the PE ratio (42.9x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for LLY stock valuation?
PE ratio gives a quick relative read — how LLY is priced versus Drug Manufacturers - General peers. DCF provides an absolute value based on projected free cash flows. For LLY, with a strong ROE of 101.3%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See LLY DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Healthcare valuationsP/E and DCF value LLY with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.