Value
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.0 |
| P/S | 0.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.9 |
| PEG | 5.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 25.3x
- ▸PEG: 1.45
LLY · Why this verdict
Why Eli Lilly and (LLY) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.5/10
ConfidenceMEDIUM
MacroCAUTIOUS
TrendMatrix Research · core thesis
Engine thesis — one sentence
LLY at $1064.74 is an elite compounder (Rule of 40 = 68 elite, ROE 107%, 35% margins, 4/4 beats, 56% revenue growth) with V9 BREAKOUT setup and HIGH conviction sizing — but asymmetry at 0.2 (below the engine's 1.5 threshold)@spot fails (2.7% upside to TP $1093), D/E 1.4 leverage penalty, and elevated put/call 1.45 produce STARTER; action_note 'Growth is cheap relative to earnings, but the chart hasn't confirmed yet.'
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Engine signal |
|---|---|---|
Quality 8.2 with notes 'Excellent ROE: 107%', 'Strong margins: 35%', 'Wide economic moat', 'Compounder quality: strong returns + growth', 'Rule of 40: 68 (elite)' — bull_case 'High-quality business' confirms. Quality breakdown | Rule of 40 component stays at 9.0+ and ROE component stays at 10.0 over next 2 refreshes. | →stable |
| CounterFCF/NI 36% RED FLAG shows incretin capex is depressing cash conversion; if FCF stays below 50% past 4 quarters, the 'elite' compounder label decays. | ||
Bull_case 'Strong earnings beat streak (4/4)' with avg_surprise_pct 16.77% — Q1 2026 beat 25.9%, Q3 2025 beat 19.15% — earnings power is structurally above consensus and accelerating. Bull case (item 1) | Beat count holds at 4/4 with avg_surprise_pct above 10% by the 2026-08-05 print. | →stable |
| CounterGLP-1 demand growth depends on supply ramp; if Mounjaro/Zepbound supply lags expectations, the beat magnitudes compress to 5-10%. | ||
V9 setup_type BREAKOUT (golden cross, above all MAs, RSI 68, MACD bullish) with suitability_rationale 'Beta 0.48<0.8, Div 65.0%, Q=8.2' — CONSERVATIVE-rated stock confirming uptrend. Chart pattern detection | Momentum subscore stays above 6.0 with RSI between 60-75 on next refresh. | →stable |
| CounterRSI 68 approaching overbought + technical bollinger 1.2 + support_resistance 0.7 show price is far above support — breakout exhaustion risk if no catalyst follow-through. | ||
V9 asymmetry at 0.2 (below the engine's 1.5 threshold)@spot gate failure with v9.upside_pct 2.7 vs downside_pct 15.0 and bear_case 'Analyst target reached - limited upside remaining' — TP $1093.59 leaves $29 above $1064.74 spot. Engine gate (failed) | Analyst take_profit advances above $1170 (10%+ above spot) restoring asymmetry_ratio above 1.5 within 2 refreshes. | →stable |
| CounterGLP-1 TAM is being revised upward; sell-side targets routinely lag during pharma re-rating phases — gate trip is target-anchoring lag, not a top. | ||
Action_note '...the chart hasn't confirmed yet' and STARTER sizing with entry_target $970.34 (ma50_sticky, ~9% below spot) — accumulate the GLP-1 compounder on weakness rather than chase the breakout. Engine summary | Price pulls back toward entry_target $970.34 within 2 refreshes restoring asymmetry above 2.0. | →stable |
| CounterGLP-1 demand re-acceleration could prevent any meaningful pullback — waiting may mean watching the stock advance to $1200 before any -9% pullback. | ||
Quality 8.2 with notes 'Excellent ROE: 107%', 'Strong margins: 35%', 'Wide economic moat', 'Compounder quality: strong returns + growth', 'Rule of 40: 68 (elite)' — bull_case 'High-quality business' confirms.
→stableQuality breakdown
- Expectation
- Rule of 40 component stays at 9.0+ and ROE component stays at 10.0 over next 2 refreshes.
CounterFCF/NI 36% RED FLAG shows incretin capex is depressing cash conversion; if FCF stays below 50% past 4 quarters, the 'elite' compounder label decays.
Bull_case 'Strong earnings beat streak (4/4)' with avg_surprise_pct 16.77% — Q1 2026 beat 25.9%, Q3 2025 beat 19.15% — earnings power is structurally above consensus and accelerating.
→stableBull case (item 1)
- Expectation
- Beat count holds at 4/4 with avg_surprise_pct above 10% by the 2026-08-05 print.
CounterGLP-1 demand growth depends on supply ramp; if Mounjaro/Zepbound supply lags expectations, the beat magnitudes compress to 5-10%.
V9 setup_type BREAKOUT (golden cross, above all MAs, RSI 68, MACD bullish) with suitability_rationale 'Beta 0.48<0.8, Div 65.0%, Q=8.2' — CONSERVATIVE-rated stock confirming uptrend.
→stableChart pattern detection
- Expectation
- Momentum subscore stays above 6.0 with RSI between 60-75 on next refresh.
CounterRSI 68 approaching overbought + technical bollinger 1.2 + support_resistance 0.7 show price is far above support — breakout exhaustion risk if no catalyst follow-through.
V9 asymmetry at 0.2 (below the engine's 1.5 threshold)@spot gate failure with v9.upside_pct 2.7 vs downside_pct 15.0 and bear_case 'Analyst target reached - limited upside remaining' — TP $1093.59 leaves $29 above $1064.74 spot.
→stableEngine gate (failed)
- Expectation
- Analyst take_profit advances above $1170 (10%+ above spot) restoring asymmetry_ratio above 1.5 within 2 refreshes.
CounterGLP-1 TAM is being revised upward; sell-side targets routinely lag during pharma re-rating phases — gate trip is target-anchoring lag, not a top.
Action_note '...the chart hasn't confirmed yet' and STARTER sizing with entry_target $970.34 (ma50_sticky, ~9% below spot) — accumulate the GLP-1 compounder on weakness rather than chase the breakout.
→stableEngine summary
- Expectation
- Price pulls back toward entry_target $970.34 within 2 refreshes restoring asymmetry above 2.0.
CounterGLP-1 demand re-acceleration could prevent any meaningful pullback — waiting may mean watching the stock advance to $1200 before any -9% pullback.
Per-dimension breakdown
Quality
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.5 |
| FCF quality | 2.9 |
| Moat | 7.5 |
| Rule of 40 | 9.5 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 107%
- ▸Strong margins: 35%
- ▸Earnings quality RED FLAG: 36% FCF/NI
- ▸Wide economic moat
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 56% YoY
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 1.6 |
| MA position | 9.0 |
| Volume | 5.9 |
- ▸Overbought (RSI 81)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.3 |
| Analyst rating | 7.5 |
| Price target | 6.5 |
- ▸LLM news sentiment: +0.47 (n=6)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Negligible insider selling — $15,754,537 (0.002% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.3 |
| quality rank | 9.0 |
| growth rank | 9.4 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 2.1 |
| 52w position | 9.2 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.5 |
| days to cover | 8.4 |
| volatility | 4.9 |
| put call | 5.1 |
| implied vol | 6.9 |
| beta | 10.0 |
| debt equity | 4.2 |
| news risk | 5.5 |
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 61.0%
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 1.45, quality 8.2/10, growth 10.0/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:68d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.07
Upside
-1.0%
Downside
14.8%
Sizing output
STARTER
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityCONSERVATIVE — Beta 0.48<0.8, Div 61.0%, Q=8.2
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 8.2 and growth 10.0 both clear their thresholds, with asymmetric R:R of -0.07 supporting the read.
The strongest dimensions are Growth at 10.0, Quality at 8.2, and Catalyst at 7.2; the weakest are Value at 3.3, Technical at 4.0, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.07 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality 8.2 with notes 'Excellent ROE: 107%', 'Strong margins: 35%', 'Wide economic moat', 'Compounder quality: strong returns + growth', 'Rule of 40: 68 (elite)' — bull_case 'High-quality business' confirms.
Trip ifRule of 40 component falls below 6.0 or ROE component below 7.0.
- P2Bull_case 'Strong earnings beat streak (4/4)' with avg_surprise_pct 16.77% — Q1 2026 beat 25.9%, Q3 2025 beat 19.15% — earnings power is structurally above consensus and accelerating.
Trip ifBeat count drops to 2/4 with avg_surprise_pct below 5%.
- P3V9 setup_type BREAKOUT (golden cross, above all MAs, RSI 68, MACD bullish) with suitability_rationale 'Beta 0.48<0.8, Div 65.0%, Q=8.2' — CONSERVATIVE-rated stock confirming uptrend.
Trip ifSetup_type degrades to RANGE_BOUND with RSI below 50.
- P4V9 asymmetry at 0.2 (below the engine's 1.5 threshold)@spot gate failure with v9.upside_pct 2.7 vs downside_pct 15.0 and bear_case 'Analyst target reached - limited upside remaining' — TP $1093.59 leaves $29 above $1064.74 spot.
Trip ifAsymmetry_ratio stays below 0.5 for 3 consecutive refreshes.
- P5Action_note '...the chart hasn't confirmed yet' and STARTER sizing with entry_target $970.34 (ma50_sticky, ~9% below spot) — accumulate the GLP-1 compounder on weakness rather than chase the breakout.
Trip ifPrice falls below stop_loss $913.48 without entry_target triggering.