Highly Regarded

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

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

199% Premium TTM fundamentals · sector averages from covered peers

LLY trades at 61.3× TTM earnings — a 199% premium to its Healthcare sector average of 20.5× in our coverage.

The Numbers

P/E (TTM)

61.3×

Sector avg: 20.5×

P/S (TTM)

18.9×

Sector avg: 3.9×

Market Cap

$1.12T

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 $1252.00 61.3×
JNJ $253.35 24.5×
UNH $406.67 21.2×
MRK $145.30 19.2×
PFE $29.43 17.1×

Is the Premium Justified?

October 11, 2026

Eli Lilly and Company trades at a substantial P/E premium of 57.7x compared to the healthcare sector average of 27.7x. This elevated valuation is largely justified by the company's robust growth trajectory, primarily driven by the exceptional success of its diabetes and obesity drugs, Mounjaro and Zepbound. These products have generated significant revenue, with strong year-over-year growth, and are expected to continue driving future earnings expansion. Eli Lilly's deep pipeline, including promising oral weight-loss options and other therapeutic areas, further supports investor confidence in its long-term growth potential, despite ongoing manufacturing scale-up and integration costs from acquisitions.

Sources

Frequently Asked Questions

Is LLY overvalued or undervalued?
On trailing-twelve-month earnings, LLY trades at 61.3x versus a Healthcare sector average of 20.5x in our coverage — a 199% 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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ABBV PFE MRK UNH JNJ