LLY
Eli Lilly and Company
$1,222.61
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 40.3% above fair value
You pay
$1,222.61
Bear
$432.10
Fair
$871.30
Bull
$1,443.25
Bear
$432.10
-64.7%
13% stage 1 growth, 11% discount
Fair
$871.30
-28.7%
22% stage 1 growth, 11% discount
Bull
$1,443.25
+18.0%
28% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (22% base case)
Terminal Value % of EV
47%
Implied Market Multiple
90.3x
Market is pricing in (growth)
29.1%
vs 21.6% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $1315.42 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $871.30 per share.
Warnings
Wall Street's average price target is $1315.42 (from 45 analysts). Our estimate is 48% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions