Lilly can grow faster than the current quote requires as broader insurance access and overseas demand offset lower prices. My forecast supports a buy, but continued patient growth matters more than another promising trial.
Key points
- $1,405 a share is my October 2027 target, supported by 2028 earnings.
- 14% annual revenue growth through 2028 supports today's quote under my valuation assumptions.
- $7.3 billion of first-half 2026 cash remained after factories and purchased research.
The call
The market looks too pessimistic about new patients. At 25 times earnings, today's quote requires $112 billion of 2028 revenue. That assumes a 52% operating margin before purchased research and interest. Revenue would grow just 14% annually from the 2026 guidance midpoint. Overseas volume is overcoming deep discounts.
More medicine sold is outweighing lower prices- Volume contribution
- Price contribution
- Currency contribution
Source: June 2026 10-Q, filed August 5, 2026; contributions to year-over-year revenue change, not patient growth.
Patient growth can beat cheaper prescriptions. I forecast injectable volume growth of 45% in 2027 and 35% in 2028, with respective price declines of 10% and 8%. Wider insurance access and overseas penetration support this; Foundayo contributes $8 billion in 2028. I assign no sales to retatrutide, the investigational obesity drug.
Valuation
| My estimate or assumption | Value |
|---|
| 2028 revenue | $130.3 billion |
| 2028 operating margin before purchased research | 52% |
| 2028 purchased research and net interest | $6.0 billion |
| 2028 modeled earnings per diluted share | $56.19 |
| October 2027 multiple of 2028 earnings | 25 times |
| October 2027 target, rounded | $1,405 a share |
Earnings assume a 19% tax rate and 890 million diluted shares, including potential employee-share dilution. The multiple rewards sustained growth but respects high interest rates and concentrated obesity exposure. My stress case reaches roughly $1,080 versus $1,750 in the favorable case; this supports a buy, not a strong buy.
The forecast depends on continued injectable growthAnalyst scenarios, October 8, 2026: 2028 volume growth; 8% lower prices, other assumptions fixed, 25 times earnings.
Risks
- Cheaper prescriptions may overwhelm access gains; watch volume and net prices after restored commercial coverage.
- Free samples may not become repeat paid prescriptions; watch Foundayo sales rather than prescriber counts.
- Acquisitions may consume the cash needed for factories; watch purchased-research spending, debt and cash after capital investment.
What would change my mind
Two consecutive quarters of injectable revenue growth below 20%, reported by October 2027, would overturn my patient-growth thesis.