On 12 Nov 2026 our base value for Lilly (Eli) is $3,889.65 a share, 172.5% above its $1,427.28 close; 1 of 1 valuation methods put it above the price.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $3,889.65 | +172.5% | free cash flow $19.66bn, growth 38.6% for 5 years, then fading to 3% over 5 more, discounted at 7.65%; stress floor $880.48 |
| Exit multiple (P/E) | — | — | no exit multiple: the five-year median of 43.0x is 1.5x the 28.2x this name trades at today (limit 1.5x) — the market has re-rated the name, so its own history prices a business it is no longer paid for. The forward PE is not a substitute: it is today's price divided by earnings, and an anchor built from it can only restate the price |
| Sum of the parts | — | — | no sum of the parts: the filing discloses one operating segment, and one business summed is an earnings multiple with extra steps, not a second opinion |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.39 (5 years of monthly returns against the S&P 500; standard error 0.27) |
| Peer beta | 0.26 (median of 6 S&P 500 Pharmaceuticals companies) |
| Blend of own and peers | 0.34 (62% own, 38% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.56 (0.67 × 0.34 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 7.65% |
Free cash flow grows 38.60% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $19.66bn | — | — |
| Year 1 | 38.60% | $27.25bn | 0.9289 | $25.31bn |
| Year 2 | 38.60% | $37.77bn | 0.8629 | $32.59bn |
| Year 3 | 38.60% | $52.35bn | 0.8016 | $41.96bn |
| Year 4 | 38.60% | $72.55bn | 0.7446 | $54.03bn |
| Year 5 | 38.60% | $100.56bn | 0.6917 | $69.56bn |
| Year 6 | 32.67% | $133.41bn | 0.6426 | $85.72bn |
| Year 7 | 26.73% | $169.07bn | 0.5969 | $100.92bn |
| Year 8 | 20.80% | $204.24bn | 0.5545 | $113.25bn |
| Year 9 | 14.87% | $234.60bn | 0.5151 | $120.84bn |
| Year 10 | 8.93% | $255.56bn | 0.4785 | $122.28bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (7.65% − 3%) | $5.66tn |
| Terminal value in today's money | $2.71tn |
| Present value of years 1–10 | $766.46bn |
| Total present value | $3.48tn |
| Shares outstanding | 893.40m |
| Value per share = total ÷ shares | $3,889.65 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth 33.6% | Growth 38.6% | Growth 43.6% |
|---|---|---|---|
| 6.65% | $3,920.36 | $5,154.61 | $6,728.38 |
| 7.65% | $2,967.84 | $3,889.65 | $5,063.03 |
| 8.65% | $2,358.08 | $3,080.58 | $3,998.68 |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.39 | 6.88% | $4,797.70 |
| Peer beta | 0.26 | 6.30% | $5,781.96 |
| Adjusted beta (used) | 0.56 | 7.65% | $3,889.65 |
The base value is the average of the methods kept in it:
| Method | Value |
|---|---|
| Discounted cash flow | $3,889.65 |
One method is kept, so the base value is its value: $3,889.65
Base value $3,889.65 a share
One-year price simulation: a 10% chance the price is below $984.52 and a 10% chance it is above $2,180.77 in a year; a 54% chance it is higher than today's $1,427.28, from 30.87% volatility. The simulation assumes the price drifts up at our discount rate of 7.65% a year.
At $1,427.28 the price implies free cash flow growing 20.7% a year for five years and then fading toward 3% over five more; its revenue has grown 38.6%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $1,142.85 | $1,033.35 |
| 9 Oct 2026 | $1,179.27 | $1,076.64 |
| 16 Oct 2026 | $1,257.03 | $1,181.13 |
| 23 Oct 2026 | $1,273.46 | $1,181.13 |
| 30 Oct 2026 | $1,417.54 | — |
| 6 Nov 2026 | $1,354.00 | $1,263.93 |
| 12 Nov 2026 | $1,427.28 | $3,889.65 |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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