Is Eli Lilly Stock Ready If Factory Bills Outrun Its Cash?
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Eli Lilly (LLY) is in the middle of a U.S. factory build that the company puts at more than $50 billion. It broke ground on plants in Houston, Texas and Richmond, Virginia that together will cost $11.5 billion, management said on its October 29, 2026 call. If those bills grow faster than the cash its medicines bring in, a holder would feel it first in what Lilly can pay out. So how much of its cash does Lilly already put into capital spending?
Lilly Puts Most Of Its Cash Into Capital Spending
Over the twelve months to September 30, 2026, capital spending equaled 61.9% of the cash brought in by Lilly’s operations. That spending reached $19.0 billion, compared with about $9.7 billion during the twelve months before.
Because operating cash grew too, free cash flow, the cash left after that spending, still rose to $11.7 billion from $6.44 billion a year earlier. A single quarter can look much tighter, though. During the quarter ended December 31, 2025, Lilly’s operations brought in $3.23 billion and free cash flow came to just $0.254 billion. Almost all of that one quarter’s cash was spent on capital projects, but free cash flow was much higher in each of the three quarters that followed.
What Would A Cash Shortfall Cost Lilly Holders?
A shortfall would show up first in Lilly’s payouts or its borrowing, because the company already hands out about all of its free cash flow. Its dividends and buybacks came to $11.82 billion over the twelve months to September 2026, against $11.7 billion of free cash flow. Lilly’s debt rose to $49.5 billion over that year, from $42.5 billion. That $7.0 billion rise is far larger than the $0.12 billion by which payouts topped free cash flow, so payouts account for little of the new borrowing.
Lilly’s buybacks are small next to the company itself: they equal 0.456% of its stock market value.
What Room Does Lilly Have To Borrow?
Lilly carries little debt for its size. Its debt equals 3.9% of its market value, against 19.5% for the S&P 500. At the end of September, its debt minus cash stood at $44.6 billion. That amounts to about one year of operating income, which was $44.3 billion over the past twelve months. A bigger factory bill is therefore a question of buybacks and borrowing, not of whether Lilly can afford its plants.
Lilly also expects more revenue. On October 29, it raised its 2026 revenue forecast to $91.5 billion at the midpoint, up from $86 billion in its August release. Management also said 2026 revenue included about $2 billion of one-time items that it does not expect to recur, mostly milestone payments and changes in estimates for rebates and discounts.
When the company reports again, expected in February 2027, the measure to watch is how much of its operating cash Lilly puts into capital spending.
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