Eli Lilly: Incretin-Driven Above-Peer Growth Justifies Premium Valuation and Supports Overweight Rating

In a report released today, Chris Schott from J.P. Morgan maintained a Buy rating on Eli Lilly & Co, with a price target of $1,150.00.

Chris Schott has given his Buy rating due to a combination of factors that, in his view, position Eli Lilly for sustained, above‑peer growth. He expects the company’s incretin franchise, led by Mounjaro and Zepbound, to drive meaningful upside versus current Street forecasts in both 2026 and the following years, supported by strong prescription trends, expanding ex‑US demand, and improving Medicare access. In addition, the planned launch of orforglipron, an oral GLP‑1, is seen as a significant incremental growth driver that can further strengthen Lilly’s leadership in a weight management and diabetes market exceeding $200 billion. Schott forecasts low‑teens revenue growth and high‑teens earnings growth into the early 2030s, with limited exposure to major loss‑of‑exclusivity events, which he believes enhances the durability of the story.

At the same time, he views the current valuation as justified by this growth profile, with shares trading at roughly the mid‑30s multiple on his 2026 earnings estimate and the high‑20s on 2027, levels he regards as reasonable given the potential for estimates to move higher. His $1,150 December 2026 price target is derived from a discounted cash flow analysis that incorporates the projected cash generation of the core portfolio along with risk‑adjusted contributions from the pipeline. This framework uses assumptions consistent with his broader pharma coverage, including an 8.5% cost of capital and a modest long‑term growth rate, but still supports meaningful upside from current levels. Collectively, these elements underpin his Overweight (Buy) recommendation on Eli Lilly shares.