After a blockbuster Q1 2026 earnings report that sent shares up 9.8%, pharmaceutical behemoth Eli Lilly and Company NYSE: LLY continues to win. These include a proposal by the Food and Drug Administration (FDA) to suppress compounds, and the strong clinical results of its oral GLP-1, Foundayo.
Eli Lilly and Company Today
Eli Lilly and Company
- 52 week interval
- $623.78
▼
$1,149.10
- Dividend Yield
- 0.65%
- The P/E ratio
- 38.03
- Target Value
- $1,227.00
Now, the company is back in the news with an important development that highlights its strong position in the GLP-1 arena. Lilly has reached an agreement with CVS Health NYSE: CVSowner of the nation's largest pharmacy benefit manager (PBM), Caremark. The deal will expand coverage of Lilly's top GLP-1s, allowing patients to access them through their existing insurance.
Obviously, this is good as it should increase the demand for Lilly's products. However, it also weakens Lilly's biggest rival, as CVS backs off on its previous move to cut Lilly out of its coverage.
CVS reunites with Lilly After supporting Novo
With this announcement, all three of the largest PBMs in the United States will cover Lilly's entire portfolio of approved obesity medications. Express Scripts, owned by Cigna Group NYSE: CIand Optum Rx, owned by UnitedHealth Group NYSE: UNHwho has stopped the medicine. Caremark will begin covering Foundayo on June 1, while coverage will begin on Oct. 1 on Zepbound.
However, what makes this announcement particularly interesting is the context. More than a year ago, CVS struck a deal with Lilly's biggest rival, Novo Nordisk A/S. NYSE: NVO. This led to Novo's Wegovy CVS's selection of the GLP-1 treatment and excluded Zepbound from its coverage. Combined with its slightly disappointing earnings report on May 1, 2025, this power move between Lilly's top rival and the largest PBM sent LLY shares down nearly 12%.
Now, CVS has reversed itself on that decision which delivered a real blow to Lilly's stock. According to a CVS spokesperson, “What this change means is that, for those customers who do (choose to provide coverage), they will have equal access to both Novo and Lilly products, and consumers will have the same copays.” In other words, if an employer covers GLP-1 with obesity, their employees can access Novo and Lilly products equally and at the same cost.
This should significantly reverse the negative impact of CVS's initial decision—limiting access to Lilly's drugs and hurting demand. Additionally, it takes away the advantage Novo had of being the only option available to CVS customers.
Timing is another positive aspect of this decision, as Lilly looks to increase demand for Foundayo. Its oral GLP-1 lagged behind Novo's Wegovy pill—which received FDA approval a few months earlier. Now that she's on equal footing with Novo within Caremark, Lilly may have an easier time finding that. Lilly's shares gained 4% on the day of the announcement as investors saw positive results for the company.
Zooming in on the Balance Between Lilly's Rebound
Despite the many positive developments Lilly has seen in late 2026, the stock hasn't done very well. Shares fell about 1% compared with the S&P 500's gain of more than 10%. This comes as its recent gains have really started a recovery—prior to the report, shares were down nearly 21% in 2026. Now, Lilly is trading less than 5% below its all-time high. Given this, it's worth checking the stock's valuation to get a more complete understanding of LLY's stock outlook.
Currently, the stock trades at a forward price-to-earnings (P/E) ratio near 29x. This is well above the S&P 500's forward P/E of around 21x, and further above the S&P 500's leading healthcare sector P/E of around 17x. Based on these measures, Lilly's valuation looks very high.
However, compared to Lilly's history, it is not. Over the past three years, Lilly's average forward P/E is approximately 43x. Therefore, its current rate is about 33% below this rate—a very good comparison. Looking at the last 52 weeks, Lilly's forward rate is equal to 30x, just above its current level.
Lilly's forward P/E is also down significantly from 32x—when the stock was trading near its current price in February. This indicates that earnings ratios are holding back the stock price a bit—a good signal. Overall, Lilly is not a cheap stock, and it will need continued strong growth to maintain its valuation. However, these metrics show that it is also not a word that screams “great value.”
Eli Lilly and Company Stock Forecast Today
$1,227.00
15.15% changedBuy Medium
Based on 30 Analyst Ratings
| Current Price | $1,065.53 |
|---|---|
| High Forecast | $1,400.00 |
| Average prediction | $1,227.00 |
| Low Prognosis | $850.00 |
Eli Lilly and Company Stock Forecast Information
Analysts Remain Buoyed by Lilly's High Strength
The outlook for Lilly's shares, according to Wall Street analysts, remains positive. The MarketBeat consensus price target on the stock currently sits near $1,227, which means about 15% upside for the stock.
The average revised target after the company's earnings report was higher on average at $1,239.
Among these updates, Rothschild & Co Redburn's $900 target is the most bearish. Meanwhile, Barclay's target of $1,400 is the best.
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