| Position | Action |
|---|---|
| First tranche at $1,100-$1,125 entry | Scale in 33-40% of target position size with $1,090 hard stop |
| Second tranche at $1,031-$1,050 entry | Scale in remaining 33-40% reserved for 200 SMA confirmed touch |
| Keep one-third of capital in reserve | Hold for deeper opportunistic adds or averaging down on confirmation |
| Current price $1,186 | No new capital deployment; maintain existing core position only |
The bear thesis is built on static snapshots rather than dynamic analysis — LLY's 25.6x forward P/E on a 55% grower represents structural undervaluation, not overvaluation, and the stock is consolidating at full price while the market waits for the next leg-up driven by retatrutide filing in 2027, expanded Medicare Part D distribution, and continued execution.
| Indicator | Value | Signal |
|---|---|---|
| 200 SMA | $1,031.38 | bullish |
| 50 SMA | $1,157.55 | bullish |
| 10 EMA | $1,170.05 | neutral |
| RSI (14) | 53.71 | neutral |
| MACD | 3.26 vs Signal 5.92 | bearish |
| MACD Histogram | -2.66 | bearish |
| ATR (14) | $42.11 | — |
| Bollinger Upper | $1,225.19 | bearish |
| Bollinger Middle | $1,171.16 | neutral |
| Bollinger Lower | $1,117.12 | bullish |
| Price vs 50 SMA | +$28.16 (+2.4%) | neutral |
This report is AI-generated for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. Full disclaimer.
Maintain LLY at current weight; pre-commit to scale-in levels with $1,090 stop, not chase at $1,186
Hold LLY core position at current weight. The asymmetric risk-reward (~4-5% upside to $1,229.93 failed breakout versus 14-20% downside to $1,031 200 SMA) favors patience over engagement at $1,186. Do not chase; pre-commit to specific scale-in levels with $1,090 stops (below Bollinger lower band at $1,117 and recent low $1,115.68) and let price tag them. Use only mechanical MA-based invalidation (no arbitrary MACD countdowns or CPI triggers); no derivative overlays. Upgrade to Overweight requires sustained close above $1,229.93 with volume >4M shares AND MACD bullish re-cross; downgrade to Underweight requires close below $1,157 on volume or credible competitive/regulatory threat to GLP-1 moat.
When: Price reaches $1,031-$1,050 with confirmed 200 SMA touch
Then: Buy additional 33-40% of target position
↩ rebuts: “Bear claim that 39.8x TTM P/E and 1.64 PEG indicate "growth is priced in"”
LLY is a great company at a full price that has already priced in the monopoly economics — the asymmetric risk is multiple compression from macro headwinds, harder comps, and looming competition rather than upside from here.
· concedes: LLY is a great company and will likely be a great company in 2030; Q2 results were strong with $7.1B net income and raised guidance to $85-$87B; Beta of 0.506 is technically correct as a market correlation measure; The 102% ROE and 83% gross margins are real business quality metrics; The IRA drug pricing risk was somewhat overstated — the Texas ruling was one favorable outcome, though state-level actions remain live; LLY's Foundayo (oral GLP-1) is a legitimate competitive advantage in the near term
→ vs conservative: TTM P/E of 40x and PEG of 1.64 are rearview mirror metrics; forward PEG of 0.47 proves growth is not fully priced
→ vs conservative: IRA drug pricing risk and Pfizer competition are distant threats that don't justify waiting for 200 SMA at 1,031, which only offers 13 percent better entry with wider stop
→ vs neutral: Waiting for breakout above 1,230 or pullback to 200 SMA is intellectually safe but guarantees underperformance; scale-ins should be committed when moving averages are tagged, not timidly nibbled
Support: 1157.55 · 1117.12 | Resistance: 1225.19 · 1229.93
HOLD recommended. The long-term uptrend remains intact with the 200 SMA rising steadily and price sitting 15% above it, but the bearish MACD crossover (histogram at -2.66 and widening) and expanding volatility (ATR $42.11, up from ~$36 in mid-July) argue against initiating new long positions. Support at 50 SMA ($1,157.55) was defended on the August 3-4 dip to $1,115.68, while resistance at $1,225.19 (Bollinger upper) rejected the June 29 attempt at $1,229.93. A bullish scenario requires a daily close above $1,225 on expanding volume to re-open upside toward $1,260+; a bearish breakdown below $1,157 would expose $1,117 and potentially a deeper 10-15% correction toward the 200 SMA.
Market Cap
$1,057.35 billion
52-Week High
$1,249.45
52-Week Low
$623.78
50-Day MA
$1,149.37
200-Day MA
$1,026.34
Beta
0.506
P/E (TTM)
39.79
Forward P/E
25.62
PEG Ratio
1.64
P/B
33.96
EPS (TTM)
$29.80
Forward EPS
$46.28
Book Value/Share
$34.92
Net Income (TTM)
$26.71 billion
TTM Revenue
$79.67 billion
Latest Q Revenue
$19.80 billion
Q1 2025 Revenue
$12.73 billion
Q1 2026 Gross Profit
$16.22 billion
Q1 2026 Operating Income
$9.78 billion
Q1 2026 Net Income
$7.40 billion
Q1 2026 Diluted EPS
$8.26
Q1 2025 Diluted EPS
$3.06
Gross Margin
~83%
Operating Margin
54.2%
Net Margin
33.5%
Q1 2026 Op Margin
~49.4%
Q1 2026 R&D
$3.51 billion
Effective Tax Rate
16.4%
ROE
102.3%
ROA
20.4%
Total Assets
$116.58 billion
Total Liabilities
$85.38 billion
Stockholders' Equity
$31.20 billion
Total Debt
$43.37 billion
Net Debt
$38.09 billion
Cash & Equivalents
$5.28 billion
Goodwill & Intangibles
$13.50 billion
Net PPE
$26.54 billion
Inventory
$14.53 billion
Receivables
$21.18 billion
Current Ratio
1.355
Debt/Equity
162.1%
Working Capital
$18.2 billion
FCF (TTM)
$11.07 billion
Q1 2026 Operating CF
$5.33 billion
Q1 2026 Capex
$2.33 billion
Q1 2026 FCF
$2.80 billion
Annualized Capex
~$9-10 billion
Annual Dividends
~$5.6 billion
Dividend Yield
0.58%
LTM Buybacks
~$6.4 billion
Q4 2025 Revenue
$19.29 billion
Q3 2025 Revenue
$17.60 billion
Q2 2025 Revenue
$15.56 billion
Strengths
Concerns
Eli Lilly is a global pharmaceutical leader with a market cap of ~$1.06 trillion, experiencing one of the most explosive growth phases in its history driven by GLP-1 receptor agonists (Mounjaro/Zepbound). The company posted Q1 2026 revenue of $19.80B (+55.6% YoY) with EPS of $8.26 (up 170% YoY), supported by best-in-class gross margins of ~83% and operating margin of 54.2%. The recommendation is HOLD or selective BUY on weakness toward the 200-day MA of ~$1,026, with forward P/E of 25.62x on $46.28 forward EPS considered reasonable for the growth trajectory. Key risks include premium valuation, GLP-1 competition, and healthcare policy headwinds.