LLY
Eli Lilly and Company
$1,065.00
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 24.4% above fair value
You pay
$1,065.00
Bear
$424.69
Fair
$856.34
Bull
$1,418.47
Bear
$424.69
-60.1%
13% stage 1 growth, 11% discount
Fair
$856.34
-19.6%
22% stage 1 growth, 11% discount
Bull
$1,418.47
+33.2%
28% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (22% base case)
Terminal Value % of EV
47%
Implied Market Multiple
79.0x
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 $1265.55 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $856.34 per share.
Warnings
Wall Street's average price target is $1265.55 (from 45 analysts). Our estimate is 46% 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