Eli Lilly (LLY) just used the American College of Rheumatology Convergence 2026 meeting to spotlight fresh data on retatrutide, Zepbound and Taltz in obesity linked to joint and autoimmune disease.
Eli Lilly sits at a share price of US$1,364.73 after a recent pullback of about 3.8% on the day and a flatter 7 day move. The 30 day share price return of 17.9% and year to date gain of 26.3% follow strong Q3 results, raised 2026 revenue guidance and steady ETF buying, where funds like XLV have been adding to positions. A 1 year total shareholder return of 46.5% and roughly 4.4x 5 year total shareholder return highlight long term momentum that recent clinical and obesity franchise updates are helping to keep in focus.
Scan Eli Lilly's momentum in obesity and autoimmune care against a curated field of peers by running the 34 healthcare AI stocks alongside this latest ACR catalyst.
Eli Lilly now trades about 5% below the average analyst target and around a 23% discount to one intrinsic value estimate after a sharp run. Is that caution mispriced, or is it a fair reflection of concentrated obesity risk and falling net prices?
Most Popular Narrative: 8% Undervalued
Against Eli Lilly's last close of $1,364.73, the most followed narrative on Simply Wall St pegs fair value at $1,477.03, implying the shares trade at a modest discount built on detailed growth and cash flow work.
Eli Lilly already runs one of the fastest-growing drug businesses on earth, and its most powerful drug is not even approved yet.
This is the most important section. Lilly has a next-generation weight loss drug called retatrutide currently completing its final round of clinical trials. It works differently from everything on the market today. Current drugs activate one or two biological signals in the body to suppress appetite and manage blood sugar. Retatrutide activates three simultaneously, making it meaningfully more powerful than anything currently approved.
See why 82 investors see Eli Lilly as 8% undervalued .
According to AHaron, the narrative uses a 7.5% discount rate and a detailed earnings path to arrive at that $1,477.03 fair value mark, leaving around 8% upside relative to the quoted price. That sits alongside Simply Wall St's own future cash flow estimate of $1,761.36, which also points to Eli Lilly trading below an internally modelled value based on projected cash generation.
The story behind the valuation is not only obesity. The business already reports annual revenue of $86.5b and net income of $27.6b, with cardiometabolic treatments like Mounjaro, Zepbound and Trulicity layered on top of oncology and immunology franchises such as Verzenio and Taltz. Forecast earnings growth of 19.49% per year and revenue growth of 11.2% per year feed into that narrative, supported by a net profit margin that recently moved from 31% to 31.9%.
Return on equity at 68.49% is described as outstanding in the statements, although it is influenced by a high level of debt and non cash earnings. Earnings growth of 49.8% over the past year, ahead of a 5 year average of 38.2% per year and faster than the 19% industry figure, helps explain why both the narrative and the SWS DCF model see value even after a strong share price run.
On valuation signals, Simply Wall St flags Eli Lilly as good value based on a P/E of 44.1x relative to an estimated fair P/E of 57.1x, and also cheap versus a peer average P/E of 61.1x, while still expensive compared with the broader US Pharmaceuticals group at 15.8x. That mix suggests the market is pricing in premium earnings power versus the sector, but the narrative implies the multiple could still be below where earnings quality and forecast growth might justify it over time.
Result: Fair Value of $1,477.03 (UNDERVALUED)
Still, the Eli Lilly story can change quickly if obesity pricing pressure deepens or if fresh safety data undercuts confidence in retatrutide or other pipeline assets.
Find out about the key risks to this Eli Lilly narrative .
Next Steps
Reading through Eli Lilly's mix of upside potential and flagged concerns, you can see both enthusiasm and caution in the numbers and narratives. Move quickly from headline impressions to your own view by weighing the 3 key rewards and 2 important warning signs .
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This article is general in nature and was produced with the assistance of AI automation, based on data and analysis from Simply Wall St. 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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