Eli Lilly (LLY) has recently become a core holding in my portfolio, and current market conditions present an attractive opportunity to initiate or expand a position. The stock is trading below its 50-week moving average, despite continued strong momentum in its GLP-1 franchise. This suggests the company—widely regarded as a leader in the pharmaceutical space—is temporarily undervalued.
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Even in its fundamentals and growth trajectory, I believe a 12-month price target of $1,000 is realistic, with the potential to reach $1,200. This implies an upside of approximately 30% to 55% from current levels, making it a compelling entry point. As a result, I remain stoutly Bullish on LLY.
Eli Lilly Dominates at Breakneck Speed
In Fiscal 2024, Eli Lilly delivered impressive 32% year-over-year revenue growth—a performance likely to continue with similar strength into 2025. However, with growth expected to moderate in 2026 and 2027, it’s important to maintain realistic expectations. This is no longer a company in the early stages of hyper-growth; rather, it has evolved into a mature market leader nearing the latter phase of its recent bull run.
Given this outlook, a reasonable holding period may be in the range of 24 to 36 months, after which reallocating to higher-growth opportunities could become a prudent strategy. In the meantime, the company’s valuation is raising eyebrows.
Eli Lilly stock has a non-GAAP (Generally Accepted Accounting Principles) price-to-earnings ratio of nearly 60, compared to just 17 for the sector. However, such a high valuation is validated by the company’s 80% diluted earnings per share growth over the last year, compared to just 13% for the sector as a whole. I think Eli Lilly’s valuation is not just acceptable, it’s actually slightly cheap.
With the stock trading just under the 50-week moving average in price, at the very least, we have a fair valuation on our hands. Deep-value territory refers to a stock price below the 200-week moving average, but this is very rare for top-class companies, as it usually signifies significant operational issues that are not easily overcome in the near term.
The 14-week RSI is under 50, which again confirms neither an overbought nor oversold stock, but equity that is priced “just right”. As Warren Buffett has famously said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Diversified High-Growth Operations Support Resilient Returns
Currently, Eli Lilly’s core growth opportunity lies in its metabolic franchise, related explicitly to GLP-1s (glucagon-like peptide-1). Mounjaro and Zepbound from this segment had 2024 sales of $16.5 billion, with significantly better weight loss versus its main competitor, semaglutide, developed by Novo Nordisk (NVO).
Eli Lilly also has an oral GLP-1, called orforglipron, which is expected to launch in 2025/2026 with massive demand driving further revenue growth. Retatrutide, offering a “triple G” GLP-1/GIP/glucagon (gastric inhibitory polypeptide) combo, shows an unprecedented 24.2% weight loss and is expected to be a mega-blockbuster in the late 2020s. According to market data, LLY’s revenues are climbing, with diabetes drugs accounting for a larger total share.
However, Eli Lilly doesn’t stop there. It’s also got a strong foothold in the immunology, oncology, and Alzheimer’s markets. Management has demonstrated an aggressive acquisition strategy in immunology by integrating companies such as Dice and Morphic. Eli Lilly holds leadership positions in novel modalities, including radiopharma in oncology, and has achieved a breakthrough with donanemab, which is among the first to market as a disease-modifying drug in Alzheimer’s treatment.
When coupled with its multi-billion-dollar capital expenditures strategy for global manufacturing scale across Indiana, North Carolina, Germany, and Ireland, it’s pretty clear that Eli Lilly’s moat is both technically superior and resilient through vertical integration.
Macro Tailwinds Far Outweigh Structural Risks
Expected interest rate cuts in late 2025 and into 2026 are likely to provide a meaningful tailwind for Eli Lilly, supporting both its valuation multiples and overall sentiment toward growth-oriented healthcare stocks. Unlike tech stocks, which often lead economic cycles, healthcare equities tend to rally alongside real-economy expansion.
With tech already experiencing a strong rebound in 2025, it’s reasonable to anticipate that healthcare could be next in line for a similar upswing. Additionally, a potentially weaker U.S. dollar following rate cuts would enhance international revenue, which currently accounts for roughly one-third of Eli Lilly’s total sales.
While there is always a risk of regulatory delays or clinical setbacks that could allow competitors to gain ground, management appears highly focused on maintaining its momentum. The company has faced challenges in the past, but none have fundamentally disrupted its growth trajectory. Provided that Eli Lilly continues on its current path, and assuming investors hold it within a diversified portfolio of 10–15 high-quality stocks, the overall strategic risk appears minimal at this time.
Is Eli Lilly Stock a Good Buy Now?
On Wall Street, Eli Lilly has a consensus Strong Buy rating based on 16 Buys, two Holds, and one Sell. LLY’s average stock price target of $999.57 indicates a 28.9% upside potential over the next 12 months.
With my high estimate of $1,200, we’ll be looking at about a 55% return from current levels. To achieve this, the stock just needs a price-to-earnings ratio of 27 and normalized earnings per share of $45.
Eli Lilly Is One of the Market’s Best Investments
Eli Lilly presents a highly compelling investment opportunity at this moment. A potential 30% return over the next 12 months would already be impressive, while a 55% gain would represent exceptional, market-leading performance. The company benefits from strong, disciplined management and a durable competitive moat across several high-growth therapeutic areas.
While weight-loss treatments remain the primary engine of near-term returns, Eli Lilly’s long-term growth outlook is underpinned by a diversified portfolio and leadership in multiple key markets. I remain confidently bullish on the company and intend to hold my position for the foreseeable future.