Is Eli Lilly & Co. overvalued or undervalued?

Jun 25 2025 08:10 AM IST
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As of June 3, 2025, Eli Lilly & Co. is considered very expensive and overvalued with a P/E ratio of 47, significantly higher than peers like Johnson & Johnson and Merck, and has underperformed the S&P 500 with a 1-year return of -12.81%.
As of 3 June 2025, the valuation grade for Eli Lilly & Co. has moved from expensive to very expensive, indicating a significant shift in perception. The company is currently assessed as overvalued. Key ratios include a P/E ratio of 47, an EV to EBIT of 38.80, and an ROE of 97.65%.

In comparison to peers, Eli Lilly's P/E ratio is substantially higher than Johnson & Johnson's 22.46 and Merck & Co.'s 14.42, both of which are considered attractive. This stark contrast highlights Eli Lilly's overvaluation relative to its industry counterparts. Additionally, the company's recent stock performance has lagged behind the S&P 500, with a 1-year return of -12.81% compared to the index's 10.26%, reinforcing the notion that the stock may be overpriced in the current market environment.
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