Eli Lilly and Company is a global pharmaceutical company focused on discovering, developing, manufacturing, and marketing human pharmaceutical products. The company operates in a single business segment, concentrating on therapeutic areas such as cardiometabolic health, oncology, immunology, and neuroscience to create innovative medicines.
Wall Street consensus — sourced weekly via public disclosures
Analyst coverage data sourced from public filings. Xavier analyst thesis summary available after weekly Perplexity scan completes.
Financial summary — Gemini analysis
Signal
Revenue
$65,179 million
45% YoY
Operating margin
39.5%
Net income
$20,640 million
Free cash flow
$8,972 million
Dividend / share
$6.00 per share
Total debt
$42.5 billion
Cash: $7.3 billion
CapEx guidance
null
Earnings quality:HIGH
Recurring revenue:94%
Cash conversion:0.8x
Non-recurring items: Acquired in-process research and development charges of $2,910 million related to Scorpion Therapeutics' PI3Kα inhibitor program STX-478 and SiteOne Therapeutics., Asset impairment, restructuring, and other special charges of $484 million primarily related to a litigation charge and acquisition/integration costs associated with the acquisition of Verve Therapeutics.
Confidence 6.7 / 10 · 75% model agreement ·
Scheduled Jun 07, 2026
LLY's fundamental growth engine remains exceptional — Q1 2026 revenue surged 56% YoY to $19.8B, guidance was raised to $82-85B, and yesterday's retatrutide Phase 3 TRIUMPH-1 data (28.3% body weight reduction) extends the pipeline story. However, the stock trades at 40x TTM P/E with a current price of $1,131 against a consensus target of $1,215 — leaving only 7.4% upside to consensus — and the macro backdrop is NEUTRAL-to-BEARISH with pricing pressure from PBMs, Medicare negotiation creep, and a 13% already-observed decline in realized GLP-1 prices. The near-term risk/reward is balanced rather than compelling.
Strongest bull case
Retatrutide Phase 3 TRIUMPH-1 data released June 6, 2026, showing ~28.3% average body weight loss — a potential best-in-class result that could meaningfully expand LLY's GLP-1 moat and re-rate the forward multiple if ADA Scientific Sessions catalyze further positive sentiment in the next 5 trading days.
Strongest bear case
Realized GLP-1 prices are already falling structurally (-13% in Q1), PBMs and employers are tightening access controls with prior authorizations and BMI thresholds, and Trump administration drug pricing negotiations targeting weight-loss drugs specifically could further compress net revenue per unit — all of which puts the $82-85B 2026 revenue guide at risk of being a ceiling rather than a floor.
What the market may be missing
The $10B+ M&A spree (8 acquisitions in 2026 alone, with up to $25B in potential total spend) is being framed as pipeline optionality, but the capital deployment at peak cash-flow could be dilutive to near-term free cash flow yield, and integrating Orna, Centessa, Kelonia, and Ajax simultaneously creates meaningful execution risk that consensus models are not discounting. Additionally, the 340B discount halt could escalate into a federal regulatory response that creates headline noise over the next 5 trading days.
Chair, President, and Chief Executive Officer · Eli Lilly and Company
CEO since 2017
Total compensation
$36,698,337 ▲ 25.6% YoY
Prior year: $29,242,926
Pay vs performance
Aligned
Board assessment
Say-on-pay approval
96%
Shareholder vote
Board independence
11/12 (92%)
Base salary$1,700,000
Bonus / incentive$6,485,500
Stock awards$23,325,000
CEO letter to shareholders
Signal
No shareholder letter on file for LLY
Some companies file their annual report without a separate CEO letter.
When available, Xavier extracts strategic themes, tone analysis, and
forward-looking statements to help you read between the lines.
Executive compensation
Signal
Name
Title
Total compensation
David A. Ricks
Chair, President, and Chief Executive Officer
$36,698,337
Lucas Montarce
Executive Vice President and Chief Financial Officer
$8,483,315
Daniel M. Skovronsky, M.D., Ph.D.
Executive Vice President, Chief Scientific and Product Officer and President, Lilly Research Labs
$17,786,576
Anat Hakim
Executive Vice President, General Counsel and Secretary
$9,845,518
Jake Van Naarden
Executive Vice President and President, Lilly Oncology and Head of Corporate Business Development
$7,586,097
Source: DEF 14A proxy statement · 2026-03-20
Governance
Pro
Dual-class shares:No
Poison pill:No
Clawback policy:Yes
Stock ownership req.:Yes
Shareholder proposals
Amend the Bylaws to Require an Independent Board Chair
AGAINST
Pending
Prepare an Annual Lobbying Report
AGAINST
Pending
Debt intelligence
Pro
47.8x
Interest coverage
Xavier risk radar
Pro
Covenant headroom
Moderate leverage — no covenants on file
Earnings quality
High quality (cash conversion 0.8x)
Risk trend
Risk increasing — The significant costs and high uncertainty inherent in pharmaceutical research a
Mgmt narrative
Management tone: Cautiously optimistic
Analyst drift
Consensus Buy — targets stable
Insider sentiment
Pattern detection — 90 days needed
Signal history
Signal
Date
Direction
Conf.
Agree.
Thesis
Price
Type
Jun 07, 2026
NEUTRAL
6.7/10
75%
LLY's fundamental growth engine remains exceptional — Q1 2026 revenue surged 56% YoY to $19.8B, guid...
$1,131.42
Sched.
May 31, 2026
NEUTRAL
6.7/10
75%
LLY's fundamentals are exceptional — 56% Q1 revenue growth, raised full-year guidance to $82-85B, FD...
$1,105.00
Sched.
May 24, 2026
NEUTRAL
6.4/10
75%
LLY has exceptional fundamental momentum — Q1 2026 Mounjaro revenue surged 125% YoY to $8.7B, full-y...
$1,065.00
Sched.
May 17, 2026
NEUTRAL
6.3/10
75%
LLY's fundamental business is genuinely exceptional — 56% Q1 revenue growth, Mounjaro up 125%, Found...
$1,004.92
Sched.
May 10, 2026
NEUTRAL
6.9/10
67%
LLY remains a high-quality large-cap pharma franchise with a supportive macro backdrop and strong lo...
$948.45
Sched.
May 03, 2026
NEUTRAL
7.3/10
50%
LLY just delivered a massive Q1 2026 earnings beat (EPS $8.55 vs. $6.85 est., +25% upside) with 56% ...
$963.33
Sched.
Apr 12, 2026
BULLISH
7.5/10
75%
LLY has just cleared a major pipeline milestone with FDA approval of Foundayo (orforglipron) on Apri...
$939.47
Sched.
Showing last 7 signals
LLYEli Lilly and Company
Signal
FY2026 annual report (10-K filed 2026-02-12)
INCOME STATEMENT
?Revenue
$65,179 million45% YoY
Total sales from drugs, medical devices, insurance premiums, and healthcare services. Up 45% from last year. Management has guided capital spending of null.
?Operating income
$25,731 million
What remains after subtracting all operating costs — salaries, materials, rent, R&D — from revenue. This is the profit from actually running the business, before interest and taxes. Operating margin is 39.5%, meaning 39 cents of every dollar of revenue becomes operating profit.
?Net income
$20,640 million
The bottom line — what the company actually earned after all expenses, interest, and taxes. This is the number that gets divided by shares outstanding to calculate earnings per share (EPS), which directly affects the stock price. Net margin is 37.4%. Note: results include non-recurring items (acquired in-process research and development charges of $2,910 million related to scorpion therapeutics' pi3kα inhibitor program stx-478 and siteone therapeutics., asset impairment, restructuring, and other special charges of $484 million primarily related to a litigation charge and acquisition/integration costs associated with the acquisition of verve therapeutics.) that may not repeat.
?Free cash flow
$8,972 million
Operating cash flow minus capital expenditure. This is the money available for dividends, share buybacks, debt repayment, or acquisitions. Free cash flow is what many professional investors consider the truest measure of financial health.
?EPS (diluted)
$8.26
Earnings per share — net income divided by total shares outstanding (including stock options and convertible bonds that could become shares). This is the single number most investors watch because it directly connects company profits to your ownership stake.
?Dividend per share
$6.00 per share
Cash paid to shareholders each year for every share they own. Healthcare dividends are often funded by patent-protected drug revenue with predictable cash flows.
BALANCE SHEET
?Total assets
$116.6B
Everything the company owns — cash, factories, equipment, patents, inventory, investments. Includes drug patents, manufacturing facilities, clinical trial data, and acquired pharmaceutical portfolios.
?Cash & equivalents
$7.3 billion
Money available right now — bank accounts, money market funds, short-term government bonds. This is the company's financial cushion. More cash means more flexibility to invest, acquire, or survive a downturn without borrowing.
?Total debt
$42.5 billion
All money the company owes — bonds, bank loans, credit facilities. Compare this to cash to understand the net debt position. The company holds $7.3 billion in cash against this debt.
?Shares outstanding
899.3 million
Total number of shares that exist — owned by all investors, insiders, and institutions combined. When the company reports EPS, this is the denominator. Share buybacks reduce this number, which increases EPS even without earnings growth.
?Debt-to-equity ratio
1.3%
How much debt the company uses for every dollar of shareholder equity. Under 100% means more equity than debt (conservative). Over 200% means heavy leverage. Banks and utilities naturally run higher ratios.
CASH FLOW
?Operating cash flow
$5.3B
Actual cash generated from running the business — not accounting profits, real money coming in the door. This is more trustworthy than net income because it's harder to manipulate. A company can report profits but still run out of cash.
?Depreciation & amortization
$509M
A non-cash expense that spreads the cost of pharmaceutical manufacturing equipment and acquired drug patents over their useful life. This reduces reported income but no cash actually leaves the company — that's why it gets added back to calculate EBITDA and operating cash flow.
EARNINGS QUALITY
?Accrual quality
HIGH
Measures how well reported earnings match actual cash generation. HIGH means earnings are backed by real cash. LOW means the company may be using accounting techniques to inflate reported numbers. Professional investors check this before trusting EPS.
?Recurring revenue
94%
94% of revenue comes from repeat sources — ongoing contracts, subscriptions, or regular customer purchasing patterns rather than one-time sales. Higher recurring revenue means more predictable future earnings.
?Cash conversion
0.8x
Operating cash flow divided by net income. Above 1.0x means the company generates more cash than it reports in profits — a sign of high-quality earnings. At 0.8x, the company is generating less cash than reported profits — investigate why.
?Non-recurring items
2 identified
One-time items that affect the bottom line but won't repeat: acquired in-process research and development charges of $2,910 million related to scorpion therapeutics' pi3kα inhibitor program stx-478 and siteone therapeutics., asset impairment, restructuring, and other special charges of $484 million primarily related to a litigation charge and acquisition/integration costs associated with the acquisition of verve therapeutics.. When evaluating the company's true earning power, investors strip these out to see what the business earns on a normal basis.
?Management tone
Cautious Optimistic
How management sounds in their SEC filings — are they confident, cautious, or defensive? This is analyzed from the actual language used in the 10-K annual report. A shift in tone from prior years can signal changing conditions before the numbers reflect it.
?Top risk factor
Increasing
The significant costs and high uncertainty inherent in pharmaceutical research and development, and the ability to replenish the product pipeline with commercially successful products to offset revenue losses from expiring intellectual property or competition. Risk trend: increasing. This is the single biggest threat to the company's future earnings as identified in their SEC filing.
Click any row to expand the plain-English explanation. Source: SEC EDGAR XBRL filings.
Capital intelligence
Signal
Weighted Average Cost of Capital · Return on Invested Capital · Economic Value Added
ROIC
39.84%
WACC
6.94%
🟢 VALUE CREATOR — EVA Spread: 32.90%
?WACC
6.94%
Weighted Average Cost of Capital — the minimum return Eli Lilly and Company must earn on its investments to satisfy both debt holders and shareholders. Computed from a 96.31% equity / 3.69% debt capital structure. If the company earns less than 6.94% on its invested capital, it is destroying shareholder value.
?Cost of equity
7.03%
The return shareholders demand for holding LLY stock instead of a risk-free Treasury bond. Computed using the Capital Asset Pricing Model: Risk-Free Rate (4.25%) + Beta (0.51) × Equity Risk Premium (5.50%). A beta of 0.51 means LLY is less volatile than the overall market.
?Cost of debt (after-tax)
4.60%
What Eli Lilly and Company effectively pays on its borrowed money after the tax deduction on interest. Interest is tax-deductible, so the true cost is lower than the stated rate. Effective tax rate used: 16.43%.
?Capital structure
E: 96.31% / D: 3.69%
How Eli Lilly and Company finances its operations — the split between equity (stock market value: $1.03T) and debt (total borrowings: $39.4B). More debt means more leverage — higher potential returns but higher risk.
?ROIC
39.84%
Return on Invested Capital — how efficiently Eli Lilly and Company turns its total invested capital into after-tax operating profit. NOPAT ($26.0B) ÷ Invested Capital ($65.3B). This exceeds WACC, meaning the company creates value for shareholders.
?EVA
$21.5B
Economic Value Added — the dollar amount of value Eli Lilly and Company created (or destroyed) above its cost of capital. NOPAT ($26.0B) minus the capital charge (Invested Capital × WACC = $4.5B). Positive EVA means every dollar of capital is earning more than it costs.
?NOPAT
$26.0B
Net Operating Profit After Tax — operating income adjusted for taxes, ignoring how the company is financed. Operating Income ($31.1B) × (1 - Tax Rate 16.43%). This isolates the company's core business profitability from its financing decisions.
Xavier consensus signals are intelligence outputs, not investment advice. All signals are generated by a multi-model AI system and reflect public information at time of generation. Past signal accuracy does not guarantee future performance. Wall Street analyst consensus sourced from public disclosures, summarized weekly. Financial data sourced from SEC EDGAR and yfinance. Insider transactions sourced from SEC EDGAR Form 4 filings. Updated Jun 07, 2026.