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Novo Nordisk’s lawsuit against Eli Lilly (LLY) over alleged misleading GLP-1 advertising has put fresh attention on Lilly’s stock and raised questions about how core obesity and diabetes franchises are being marketed.
See our latest analysis for Eli Lilly.
Against this legal backdrop, Eli Lilly’s 1-day share price return of 2.49% and 30-day share price return of 6.99% sit within a broader upswing, with a 52.46% 1-year total shareholder return and a very large 5-year total shareholder return of 405.87%. This combination points to momentum still building rather than fading.
If you are looking beyond Eli Lilly and GLP-1 headlines, this could be a good moment to scan other healthcare-focused AI opportunities using the 39 healthcare AI stocks
Bulls argue Eli Lilly’s guidance hike and powerful GLP-1 and neuroscience engines justify a rich multiple, while bears point to lawsuit risk and a premium price tag. Which side does the current valuation actually support?
Most Popular Narrative: 20.4% Undervalued
According to one widely followed narrative, Eli Lilly’s fair value of $1,477.03 sits well above the last close at $1,175.41, framing the current lawsuit against a backdrop of perceived undervaluation and a strong GLP-1 pipeline story.
You are buying a business already growing at 25% annually, with its most important new drug not yet approved and not yet reflected in any revenue number, at a price that a conservative model says is 27 to 32% below fair value. The pricing headwinds are real, but they are happening to a company with manufacturing scale, regulatory depth, and a next-generation compound that has already beaten the highest analyst expectations in Phase 3.
Want to see why this narrative still calls Eli Lilly undervalued even with lawsuit noise and rich multiples? The fair value hinges on high growth, strong margins, and a future earnings multiple usually linked with market leaders. Curious which specific forecasts on revenue, profits, and valuation have to hold for that $1,477.03 figure to stack up? The full narrative lays out the entire blueprint.
On the numbers provided, the narrative works off a discount rate of 7.5% and assumes that Eli Lilly can support sizeable earnings over time, which then get capitalized at a future P/E multiple that is lower than today’s level but still elevated versus many peers. That combination is what produces a fair value meaningfully above the current $1,175.41 share price, even after a strong 1-year total return of 52.46% and a very large 5-year total shareholder return of 405.87%.
For context, Simply Wall St’s separate SWS DCF model points to a future cash flow value of $1,644.20 per share, which also sits above the current trading level and is consistent with the narrative’s conclusion that the stock is undervalued on a cash flow basis. While the two approaches use different inputs, both anchor on the idea that Eli Lilly’s current GLP-1 franchise and broader portfolio, together with its pipeline, can support future cash flows that are higher than what the current price implies.
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 narrative still hinges on successful GLP-1 trial outcomes and manageable pricing pressure; any setback or aggressive price competition could quickly change the story.
Find out about the key risks to this Eli Lilly narrative.
Another View: Eli Lilly Looks Expensive on Earnings
The narrative and SWS DCF work suggest Eli Lilly is undervalued, but the earnings multiple tells a tougher story. LLY trades on a P/E of 41.5x, compared with 24.9x for peers, 14.9x for the wider US Pharmaceuticals industry, and a fair ratio of 39.1x, which implies far less margin for error.
For investors, that gap means a lot of future success is already priced in. Any disappointment on growth, margins, or the GLP-1 story could hit the stock harder than lower rated competitors, while a strong execution path could still support today’s premium. Which side of that trade are you really comfortable with?
See what the numbers say about this price — find out in our valuation breakdown.
NYSE:LLY P/E Ratio as at Jul 2026 Next Steps
Given the mix of enthusiasm and concern around Eli Lilly, this is a good time to look at the data yourself and decide how the risk and reward trade off really looks for your portfolio. To help frame that judgment, take a closer look at the 3 key rewards and 2 important warning signs
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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.
Companies discussed in this article include LLY.
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