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Eli Lilly and Company (LLY) stock analysis

Eli Lilly sits 2.97% below its high into Oct 29 earnings, with fast growth and a premium valuation

Eli Lilly closed at 1,281.91 on Oct 27, 2026, 2.97% below its 52-week and all-time high of 1,321.21, ahead of confirmed earnings on Oct 29. Revenue grew 49.58% year over year and the operating margin is 49.72%, but forward P/E of 27.09 is in the 80th percentile of US Healthcare. Options imply a 6.38% earnings move, below the 8-quarter average of 7.76%.

  • Price: 1,281.91
  • Market Cap (USD): $1.14T
  • P/E: 42.83×
  • Fwd P/E: 27.09×
  • Div Yield: 0.52%
  • 1Y Return: 55.30%
  • Next Earnings: Oct 29, 2026
  • Mean Target: 1,354.46
  • Rating: Strong Buy

Bull case

  • Revenue growth of 49.58% year over year is in the 92nd percentile of US Healthcare (sector median 8.17%), and revenue has risen for 5 straight quarters.
  • Operating margin of 49.72% (98th percentile) and ROIC of 39.19% (sector median 10.40%) show very high profitability.
  • The stock is above its 20-, 50- and 200-day averages, with a relative strength rating of 92, a 1-year return of 55.30% and 7 straight EPS beats.

Bear case

  • Forward P/E of 27.09 (on next year's consensus EPS) is against an industry median of 15.05, and price to sales of 14.36 is in the 91st percentile; free cash flow yield is 1.75%.
  • Earnings reactions have been large: the Aug 7, 2025 move was -16.17% and the Apr 30, 2026 move was 13.17%, so results can swing the stock sharply.
  • Total debt of 54.91B against cash of 8.95B, debt to equity of 1.62× (89th percentile), and 3 insider sells with no buys in the last 90 days (net -16.0M).

What to watch

  • Q3 earnings on Oct 29, 2026 (consensus EPS 5.68; implied move 6.38%).
  • Ex-dividend date Nov 13, 2026 ($1.73 per share, paid Dec 10).
  • The 52-week high of 1,321.21 versus the 20-day average at 1,214.52 and the 50-day average at 1,190.56.
  • Implied volatility (30-day 39.86%, rank 60) after earnings.

General

Eli Lilly is a pharmaceutical company covering diabetes, oncology, immunology and neuroscience. Growth and margins are exceptional for the sector, and the stock trades near its high at a premium valuation. Earnings on Oct 29 are the next test.

Business

The profile describes discovery, development, manufacture and sale of pharmaceuticals, founded in 1876 and based in Indianapolis. In fiscal 2025, the United States was 66.71% of revenue and Europe 17.73%. Trailing revenue is $79.67B with net income of 26.71B.

Valuation

Trailing P/E is 42.83 and forward P/E is 27.09 (next fiscal year basis), against a sector median of 17.62 (80th percentile). The PEG ratio is 0.70, reflecting expected EPS growth of 38.95% next year, versus a sector median of 9.98%.

Market and analyst signals

The 15 analysts in the rating score average 'Strong Buy', and the mean target is 1,354.46, 5.66% above the price. Bernstein lifted its target to 1,450 on Oct 26. HSBC rates it Reduce with a 940 target (Sep 10). Short float is just 0.78%.

Long-term investor

Growth, margins and returns are far above sector medians, and the balance sheet is serviceable. The question for a multi-year owner is whether growth persists, given a valuation that already prices much of it in.

Growth durability

Annual revenue rose from 28.54B in 2022 to 65.18B in 2025, and diluted EPS from 6.57 to 22.95. The 3-year revenue CAGR is 31.69%. Quarterly revenue reached 22.97B in Q2 FY2026 versus 15.56B a year earlier. Consensus EPS is 34.05 for this year and 47.31 for next.

Returns and balance sheet

ROIC is 39.19% and ROE 102.44%. Net debt to EBITDA is 1.06× and interest coverage 40.43×, though total debt is 54.91B and the Piotroski score is 9. Free cash flow was 8.97B in 2025 and is 20.05B trailing.

Capital return and ownership

Dividends paid were 5.38B and buybacks 4.11B in 2025, with a 0.52% yield and 11 years of dividend growth. Institutions own 88.92%. Insiders sold in August, with no buys in 90 days.

Swing trader

The trend is firmly up, with price above all key averages and momentum positive, but it sits near the 52-week high with fresh earnings risk in two days.

Trend and momentum

Price of 1,281.91 is 5.55% above the 20-day average (1,214.52), 7.67% above the 50-day (1,190.56) and 17.93% above the 200-day (1,087.00). RSI is 63.46, MACD is above its signal line, and ADX of 32.26 indicates a strong trend.

Levels and recent action

The Oct 22 high of 1,321.21 is the 52-week high; Bollinger upper band is 1,324.73. Downside reference points are the 10-day average (1,265.33) and the 20-day low of 1,131.21. Volume on Oct 27 was 1.8M, 0.80× normal. ATR is 36.36, or 2.84% of price.

Event and flow

Earnings on Oct 29 fall inside the window. Analyst actions in October were all reiterations with several target raises. Short interest of 7.0M shares (0.78% of float, Oct 15) is low and down from 9.1M on Jul 31. Ex-dividend is Nov 13.

Options

Implied volatility is moderately elevated and above realized, with backwardation reflecting the near-term earnings event. Liquidity is strong.

Volatility level

30-day implied volatility is 39.86%, rank 60 and percentile 70 within a 52-week range of 27.81% to 48.04%. It exceeds 30-day realized volatility by 13.1 points (1.49×), so premium is rich relative to realized volatility. The skew at 25 delta is flat at +0.0 points.

Term structure and expected moves

Term structure is in backwardation (30-day versus 90-day -3.4 points), consistent with earnings pricing. The 7-day expected move is 5.52% and the 30-day is 11.43%. Implied earnings move is 6.38%, versus a 4-quarter average of 6.95% and an 8-quarter maximum of 16.17%.

Premium yields and liquidity

For the Nov 27 expiry (31 days), the 30-delta put (1,220.00 strike, 4.83% out of the money) implies an annualized cash-secured put yield of 32.07%. The 30-delta call (1,380.00) implies a covered-call yield of 22.48%. The liquidity score is 92; put/call volume ratio is 1.81×.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.