Eli Lilly (LLY) Valuation Check After Positive Phase 3 Retevmo Results And GLP 1 Growth Momentum

Simply Wall St

Tue, February 17, 2026 at 2:06 PM GMT+9 3 min read

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•                                       StockStory Top Pick 
  

  LLY

  +0.33%

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Eli Lilly (LLY) is back in focus after reporting statistically significant Phase 3 results for Retevmo in early stage RET fusion positive lung cancer, adding another clinical milestone to an already closely watched story.

See our latest analysis for Eli Lilly.

Against a backdrop of strong GLP 1 obesity and diabetes demand, upbeat 2026 revenue guidance and ongoing buybacks, Eli Lilly’s 1 year total shareholder return of 24.1% and very large 5 year total shareholder return of about 4.4x suggest momentum has been building over time, despite a softer year to date share price return of a 3.7% decline.

If you are watching how big pharma is reshaping healthcare, it can also be worth scanning AI focused drug developers using our screener of 25 healthcare AI stocks as potential next ideas.

With LLY now at $1,040, trading at roughly a 16% discount to the average analyst target and about a 26% gap to one intrinsic value estimate, you have to ask: is there still potential upside, or is future growth already priced in?

Most Popular Narrative: 12.5% Undervalued

According to a widely followed narrative from user eat_dis_watermelon, Eli Lilly’s fair value sits at $1,189, which stands above the last close of $1,040 and frames the current discount debate.

Catalysts

Read the complete narrative.

Curious how those GLP 1 forecasts and margin assumptions tie together to reach a higher fair value than $1,000 plus today? The narrative leans heavily on rapid volume expansion, premium pricing and a rich future earnings multiple. Want to see exactly how those moving parts translate into that $1,189 figure?

Result: Fair Value of $1,189 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, there are still pressure points that could flip this story, including any GLP 1 safety scare or side effect lawsuits, or extended delays in new manufacturing capacity.

Find out about the key risks to this Eli Lilly narrative.

Another View: High P/E Raises A Different Question

That user narrative leans on growth and cash flows to argue LLY looks undervalued around $1,040. Our ratios paint a tougher picture. The current P/E of 45x sits well above the US pharmaceuticals average of 20.2x and the peer average of 19x, and even exceeds the 43.5x fair ratio estimate.

Story Continues  

In practice, that means a lot of optimism is already embedded in the price. Any slip in growth, pricing or GLP 1 sentiment could hit the share price harder than a lower multiple stock, while strong execution could keep the premium intact. As an investor, which risk are you more comfortable owning?

See what the numbers say about this price — find out in our valuation breakdown.

NYSE:LLY P/E Ratio as at Feb 2026

Next Steps

Mixed signals on valuation and growth potential so far. If you want to move quickly and sharpen your own stance, weigh the company’s mix of 3 key rewards and 2 important warning signs for yourself.

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_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include LLY.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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