# Eli Lilly and Company (LLY) — InvestMoat Analysis _Last analyzed: August 13, 2026_ _Asset class: equity · Canonical page: https://investmoat.com/stocks/lly_ ## Scores | Dimension | Score (0–100) | | --- | --- | | Moat durability | 72 | | Growth trajectory | 81 | | Valuation | 73 | | **Composite** | **77** | Scores are computed deterministically from this asset’s data by the InvestMoat formula (see https://investmoat.com/llms.txt for methodology). Scores are not directly comparable across asset classes. ## Key stats - **Ticker:** LLY - **Market Cap:** ~$1.09T ## Moat Dominant GLP-1 franchise with patent protection into the late 2030s, reinforced by a deep clinical pipeline and manufacturing scale advantages. ### The GLP-1 Fortress Eli Lilly's moat is anchored in **scientific superiority and regulatory exclusivity** that cannot be replicated quickly: - **Tirzepatide Efficacy Superiority:** Mounjaro and Zepbound (tirzepatide) consistently outperform competing GLP-1 drugs in head-to-head efficacy data, with superior weight loss outcomes. This clinical evidence edge drives prescriber preference and formulary positioning that competitors must overcome with their own Phase 3 trial data — a multi-year barrier. - **Patent Wall Into the Late 2030s:** Lilly's CEO has confirmed tirzepatide compound patent protection extends 'into the back half of the 2030s' in major markets, contrasting sharply with Novo Nordisk's semaglutide facing patent expiry in select markets today. This 10+ year runway allows Lilly to compound its GLP-1 franchise revenues without near-term generic erosion. - **Manufacturing Moat at Scale:** Peptide manufacturing is extraordinarily complex; Lilly has invested billions into new manufacturing capacity globally. The expertise required to manufacture GLP-1 drugs at commercial scale — including sterile fill-finish and cold-chain logistics — represents a structural barrier that takes years for competitors to build. **Moat verdict:** Lilly's core moat — patent-protected biologics with regulatory approval — is structurally immune to AI disruption, and AI drug discovery tools actually accelerate Lilly's pipeline advantage by compressing early-stage discovery timelines. The company is a net beneficiary of AI adoption, using it to identify novel targets and optimize clinical trials faster than underfunded competitors. ### Top competitors - **[Novo Nordisk (NVO)](https://investmoat.com/stocks/nvo):** Wegovy and Ozempic in GLP-1 obesity and diabetes. - **Amgen (AMGN):** MariTide monthly obesity candidate. - **Roche (ROG.SW):** Obesity pipeline built through acquisitions. ## Growth Q2 2026 (Aug 5): Revenue rose 48% YoY to $23.0B, driven by 60% volume growth partly offset by a 13% realised-price decline. Non-GAAP EPS was $8.38 and key products contributed $15.7B, led by Mounjaro at $9.94B (+91% YoY) and Zepbound at $4.93B (+46%). Management raised FY2026 revenue guidance to $85-87B from $82-85B and raised the underlying non-GAAP EPS outlook by $2.78 at the midpoint, though acquired IPR&D charges left reported non-GAAP EPS guidance at $35.50-$36.50. Q2 was the first report including Foundayo after its April approval, while retatrutide remains the next major injectable catalyst with planned 2027 submission work and additional 2026 readouts. - **Revenue CAGR estimate:** 15-22% - **Primary type:** TAM expansion - **Margin trend:** expanding - **Key risk (moderate):** If realised GLP-1 prices keep falling faster than volume growth, while oral GLP-1 competition narrows Foundayo's advantage or retatrutide readouts fall short of best-in-class expectations, 2027-2028 EPS estimates could reset lower despite strong current demand. - **Drivers:** - Mounjaro (diabetes) — $9.94B Q2 2026 (+91% YoY), still the largest growth engine but moderating from Q1's +125% (stable) - Zepbound (obesity) — $4.93B Q2 2026 (+46% YoY), volume-led growth offset by cash-pay and rebate price pressure (decelerating) - Foundayo (oral GLP-1) + Retatrutide — Q2 was the first quarter including Foundayo after April approval; retatrutide remains on track for additional 2026 readouts and planned 2027 submission work (accelerating) - **Score derivation:** Base 82.3 (15-22% CAGR, midpoint 18.5%, compounded off the ~$86B FY2026 base) + 0 trajectory (Mounjaro stable, Zepbound decelerating, oral/retatrutide accelerating) + 4 expanding margins - 5 moderate pricing/concentration risk = 81 ## Valuation At $1,220.28, Lilly trades about 44% above the rebuilt bear case ($850) and roughly 13% below the new base case ($1,400). The old $1,200 base case is stale after Q2 revenue beat by a wide margin and FY2026 sales guidance moved to $85-87B. The stock is still expensive at roughly 34x the updated 2026 non-GAAP EPS guide, but the Q2 GLP-1 run rate and raised revenue/margin outlook justify a higher 12-24 month fair value. | Multiple | Value | Note | | --- | --- | --- | | Normalized P/E | ~41× | normalized market-data estimate; GAAP trailing multiple remains distorted by investment and IPR&D timing | | Forward P/E (NTM) | ~34× | spot price divided by FY2026 non-GAAP EPS guide midpoint of ~$36 | | PEG Ratio | ~0.9× | fwd P/E divided by the ~35% growth band | | Price / Sales (NTM) | ~13× | updated $85-87B FY2026 revenue guide | | Price / FCF | ~35-40× | high investment phase; cash conversion should improve as GLP-1 capacity scales | Lilly is no longer a bargain on absolute multiples, but the valuation is still anchored by measured growth rather than hope: Q2 revenue grew 48%, key products reached $15.7B, and revenue guidance rose again. The key risk is mix and price: Mounjaro and Zepbound volumes are surging, but realised prices are falling. Upside to the bull case requires retatrutide and Foundayo to broaden the franchise before pricing pressure slows the injectable GLP-1 curve. _(as of August 2026)_ ## Price scenarios ### Bear — $850 Foundayo adoption disappoints as Wegovy pill leads on scripts, pricing pressure erodes net revenue, and a retatrutide late Phase 3 setback removes the next-gen premium. - U.S. GLP-1 realised prices continue falling, offsetting a larger share of Mounjaro and Zepbound volume growth than expected - Foundayo adoption trails oral competitors and fails to expand the market beyond injection-averse patients - Retatrutide late-stage data lands closer to existing injectable efficacy, removing the best-in-class next-gen premium ### Base — $1,400 Mounjaro and Zepbound sustain volume-led growth, Foundayo broadens the oral GLP-1 funnel, and FY2026 revenue closes near the high end of the raised guide. - FY2026 revenue lands in the $85-87B range with non-GAAP performance margin at 49.0-50.5% - Mounjaro and Zepbound maintain strong volume growth even as realised prices decline, keeping combined quarterly sales above $15B entering 2027 - Foundayo and retatrutide progress keep Lilly positioned as the broadest oral/injectable incretin franchise ### Bull — $2,100 Retatrutide becomes the best-in-class weight-loss drug confirmed by Phase 3 data, Foundayo accelerates to mainstream oral adoption, and Kisunla reaches blockbuster scale. - Retatrutide Phase 3 breadth confirms best-in-class efficacy and sets up a 2027 filing with materially higher peak-sales expectations - Foundayo penetrates a large share of oral obesity prescriptions and expands the treated population beyond injection users - Non-GLP-1 key products in immunology, oncology and neuroscience keep growing fast enough to reduce franchise concentration --- InvestMoat is a research and education framework. Nothing here is financial advice. Past performance does not guarantee future results.