Highly Regarded

Is Eli Lilly and Company (LLY) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Healthcare sector peers in our coverage

176% Premium TTM fundamentals · sector averages from covered peers

LLY trades at 56.7× TTM earnings — a 176% premium to its Healthcare sector average of 20.5× in our coverage.

The Numbers

P/E (TTM)

56.7×

Sector avg: 20.5×

P/S (TTM)

17.5×

Sector avg: 4.0×

Market Cap

$1.04T

EPS (TTM): $20.44

Revenue (TTM)

$59.42B

Net income: $18.41B

Healthcare Peer Comparison

How LLY's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
LLY This page $1158.70 56.7×
JNJ $265.83 25.7×
MRK $147.86 19.5×
UNH $389.57 20.3×
PFE $28.47 16.6×

Is the Premium Justified?

August 9, 2026

Eli Lilly and Company (LLY) commands a substantial trailing twelve-month (TTM) Price/Earnings (P/E) multiple of 58.0x, significantly above the Healthcare sector average of 27.4x. This premium is largely justified by the company's exceptional growth trajectory, primarily propelled by the blockbuster success of its diabetes and weight-loss medications, Mounjaro and Zepbound. These drugs are experiencing robust demand, driving significant revenue increases and prompting Eli Lilly to raise its full-year 2026 guidance. Beyond current sales, the company boasts a strong pipeline with promising candidates, including potential new indications for tirzepatide and innovative therapies in Alzheimer's disease and oncology, which further underpin long-term growth expectations. The market is assigning a premium to Eli Lilly for its leadership in rapidly expanding therapeutic areas and its ability to deliver innovative, high-demand pharmaceutical products, supporting strong future earnings potential and justifying its elevated valuation relative to the broader sector.

Sources

Frequently Asked Questions

Is LLY overvalued or undervalued?
On trailing-twelve-month earnings, LLY trades at 56.7x versus a Healthcare sector average of 20.5x in our coverage — a 176.4% premium. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing LLY with its own Healthcare peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Healthcare names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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UNH PFE JNJ MRK ABBV