Eli Lilly Stock Forecast: Is LLY a $1,000 Stock in the Making?

I've had my eye on Eli Lilly (LLY) for a while now, and after really digging into the numbers this May, I’ve decided to open a position. Yeah, the stock isn’t cheap. And no, it’s not flying under the radar. But the way I see it, there’s enough long-term potential here to outweigh the risks.

If you’re curious about why I’m getting in, here’s a breakdown of what I found and what I’ll be watching going forward.

Honestly, the growth has been pretty impressive. Over the last few years, revenue has grown around 28.6% annually, and earnings per share (EPS) grew about 24.1% per year. That’s solid by any standard, especially for a company of this size.

What really stood out was their free cash flow. In 2024, it jumped to $3.76 billion — a huge rebound from the previous year. That kind of bounce shows they’ve got a strong handle on operations and can recover fast when things tighten up.

If you’re into digging deeper on metrics like this, I wrote a piece explaining why return on equity matters, which ties directly into why Lilly’s ROE of over 70% impressed me so much.

A lot of pharma companies are doing interesting things, but Lilly’s in a sweet spot. They’re leading the charge in GLP-1-based treatments for weight loss and diabetes. Drugs like Mounjaro and Zepbound are already bringing in billions, and they’ve got a new oral GLP-1 drug (orforglipron) in the pipeline that’s looking super promising.

They’re not just relying on one category either. They just acquired SiteOne Therapeutics, got an Alzheimer’s drug approved in Australia, and committed $250 million to research with Purdue University. So they’re definitely building for the long haul.

It reminds me a bit of what I wrote about Royalty Pharma (RPRX), another healthcare stock with strong R&D monetization, but Lilly feels like it’s further along the curve.

It’s definitely priced like a premium stock. The current price-to-earnings (P/E) ratio is about 58, way above the industry average of 25. Same goes for price-to-sales (P/S) at 13.1 and price-to-book (P/B) at 13.06.

But here’s the thing — the PEG ratio (which adjusts for growth) is under 0.75. That suggests the market’s pricing in future growth, and the earnings are expected to keep up. I’m okay paying a premium for a business that’s growing this fast and has a legit competitive edge.

If valuation is something you’re balancing while investing, I discussed this topic in my Lithia Motors deep dive, where valuation looked cheap but the growth story was murkier. With Lilly, it's almost the opposite.

The average 12-month price target right now is $1,011.37, which would be about 37.5% upside from where the stock sits today (around $735). The high-end target is $1,190 and the low is $700, so even the downside seems relatively contained unless something major changes.

Most analysts are still calling it a Buy or Strong Buy. One firm did downgrade it recently, but the consensus is still pretty optimistic overall.

This isn’t a risk-free stock. In fact, it just dropped 19% in May — its worst month in over a decade. That definitely gave me pause, but it also seemed like a correction after a big run-up, not a sign of weakness in the business itself.

There’s also the usual regulatory noise — things like Medicare price negotiations or insurers changing what they’ll cover. CVS recently dropped Zepbound in favor of a competitor, which stung a bit. But I’m okay living with those risks because the overall growth story still makes sense to me.

If you're someone who focuses on risk-adjusted entries, you might appreciate my analysis of UnitedHealth Group (UNH), where I explored what makes healthcare stocks attractive even when they're temporarily out of favor.

I’m not here to make your decision for you, but here’s what pushed me to pull the trigger: the company has strong fundamentals, a deep pipeline, and exposure to some of the fastest-growing parts of healthcare. The GLP-1 space is expected to grow by over 11% annually, and Lilly’s positioned to lead it.

This isn’t a get-rich-quick stock. But if you’re in it for the next 12 to 24 months — and you’re okay with some bumps — it looks like a solid play to me.

Honestly, it’s a similar kind of conviction I had when looking at Arista Networks (ANET), where the valuation looked high, but the market leadership and long-term tech trend justified the price.

Just because I opened a position doesn’t mean I’m on autopilot. Here’s what I’ll be paying attention to going forward:

• Approval progress for orforglipron (the oral GLP-1 drug)
• Changes in how insurers are handling coverage for weight-loss treatments
• Insider buying or selling — a good pulse check on executive confidence
• Pipeline news, especially around Alzheimer’s and pain therapy

I’m planning to hold and build my position slowly as these milestones come into view.

So that’s where I’m at. I like Eli Lilly’s momentum, I believe in the science and the management, and I’m willing to accept the price I paid because the growth looks real.

If you're a growth-minded investor and comfortable with a bit of regulatory risk, this might be a name worth looking into. It’s the kind of stock I’d put alongside something like Amazon — not cheap, not undiscovered, but definitely worth owning for what’s coming next.

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