Eli Lilly (LLY) has jumped back into the spotlight after its first quarter 2026 report, as strong GLP‑1 demand and fresh FDA approvals led management to lift full year revenue and profit guidance.

The share price reaction around the earnings beat and guidance raise has been positive in the very near term, with a 1 day share price return of 3.07% and 7 day share price return of 8.98%. However, the 90 day share price return of 7.74% and year to date share price return of 10.83% indicate earlier weakness. This contrasts with a strong 1 year total shareholder return of 17.83% and a very large 5 year total shareholder return, suggesting long term holders have seen substantial gains while short term momentum is rebuilding around GLP 1 growth and recent FDA decisions.

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With Eli Lilly now worth about US$862b and trading at US$963.33 per share, some models point to an intrinsic value closer to US$1,400. This raises the question of whether the market is leaving meaningful upside on the table or already pricing in years of GLP 1 growth.

Most Popular Narrative: 19% Undervalued

According to one widely followed narrative, Eli Lilly's fair value sits around $1,189 per share, comfortably above the recent close at $963.33. This puts the current debate squarely on how much GLP 1 strength is already reflected in the price.

Revenue growth of 20% to 25% p.a for the next 3 to 5 years due to lack of competition in the market place. Expecting production capacity to be sorted in the next few years, which will increase units shipped and lower operating costs as time goes on. The 10+ years time frame is still unknown due to new entrants. Confidence in this time frame is low. Based on this forecast and a discount of 9%, using the valuator tool puts the share price at around $1,200 USD.

Want to see what turns those GLP 1 expectations into that higher price tag? The narrative leans on aggressive revenue expansion, margin support and a premium future earnings multiple. Curious which combination of these inputs actually drives most of the fair value jump.

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

However, this bullish setup still faces real pressure points, including any safety concerns around GLP 1s or a sharp reset in pricing that challenges today’s high P/E expectations.

Another Take: Valuation Through Earnings Multiples

The user narrative leans on strong GLP 1 growth to argue Eli Lilly is undervalued around a $1,189 fair value, but the current P/E of 34.1x tells a more cautious story. It sits well above the US Pharmaceuticals industry at 17x and above peer averages at 23.2x, even though it is close to a 37.1x fair ratio.

That mix, expensive versus industry and peers but roughly in line with a higher fair ratio, leaves you weighing whether Eli Lilly is priced for perfection or simply reflecting its earnings profile, and how much room is left if sentiment cools.

Next Steps

With all this mixed sentiment around growth, valuation and GLP 1 expectations, it helps to look at the full picture yourself and move quickly. To weigh both the upside potential and the areas that could worry shareholders, start by reviewing the 4 key rewards and 1 important warning sign

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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.