If Eli Lilly Stock Looks Expensive, You Need To Read This

For questions about this article or underlying research, email help@trefis.com.

Eli Lilly (LLY) shares closed at $1,281.91 on October 27, 2026, trading at 35.9 times the company’s adjusted earnings over the twelve months ended in June 2026. This metric adds after-tax stock-based compensation back to normalized net income. While that multiple is high for a single year of trailing profit, backward-looking measures only tell part of the story for a company with fast-growing sales. The real question is what that same share price looks like against the profit forecast for fiscal 2026 and fiscal 2027.

What Eli Lilly Costs On Its Forecast Profit

Based on the consensus forecast for fiscal 2026, the year ending in December, Eli Lilly is trading at 37.3 times expected earnings. Against the fiscal 2027 forecast, the same share price values the company at 27.1 times expected earnings. The fiscal 2026 multiple sits higher than the trailing figure, but the two may not use the same earnings measure. On reported net income of $26.7 billion over the twelve months ended in June, the trailing multiple would be about 43 times, above the fiscal 2026 figure. The fiscal 2027 figure only represents the real price if Eli Lilly achieves the profit the forecast expects for that year.

Eli Lilly Has To Widen Its Net Margin

The consensus forecast places Eli Lilly’s fiscal 2027 net income 37.6% above the fiscal 2026 estimate, alongside a 15.6% increase in sales. This projected sales growth looks modest next to the 49.6% revenue growth the company reported over the twelve months ended in June 2026. Management also raised its fiscal 2026 revenue guide in August. With net income projected to grow faster than sales, most of the forecast’s profit gain comes from a wider margin, not from faster sales.

Analysts project a 41.1% net margin for Eli Lilly in fiscal 2027, compared to the 33.3% margin the company recorded in fiscal 2025, its last full year. That wider margin remains an assumption, not a result Eli Lilly has already achieved.

Where Eli Lilly Could Fall Short Of The Forecast

The first potential shortfall involves fiscal 2026 sales. The consensus revenue forecast for that year, $88.8 billion, sits above the top of management’s own guide of $85 billion to $87 billion, so if Eli Lilly lands inside that range, the forecast would come down.

The second risk is the fiscal 2027 margin, as U.S. prices are falling. Across all U.S. sales, pricing dropped 3% in the second quarter, driven by Zepbound and Mounjaro. That figure included a benefit from a change to estimates for rebates and discounts; excluding those adjustments, U.S. prices fell 9%. During the August 5, 2026 call, management said prices will go down as the company pushes for open access for patients, adding that this expectation is built into its guide. Lower prices on Zepbound and Mounjaro than analysts expect would make the wider margin harder to reach and could pull the fiscal 2027 profit forecast down. That forecast is already uncertain: the highest and lowest earnings estimates for fiscal 2027 differ by 14.2% of the average estimate.

If the consensus forecast materializes, the fiscal 2027 multiple offers a fair picture of what you pay for Eli Lilly today. Most of the forecast’s profit gain comes from the wider margin, and without it, the stock is a riskier bet, priced for profit the company has not yet earned. Eli Lilly’s U.S. price, which management expects to keep falling, remains the measure to watch when the company reports in October 2026.

Sitting On A Big Gain In Eli Lilly?

After a run like this, the hard questions are personal: hold, trim or sell, and the tax on each. Our partner advisory firm offers a free strategy review of ways to keep part of the upside, protect the rest and spread the tax over years.

Request A Free Strategy Review

Spot an error or want more like this? Tell us in 10 seconds.