Short answer: Eli Lilly’s latest located guidance calls for $85 billion to $87 billion of 2026 revenue, following a 48% second-quarter increase. That growth can support a bullish investment case, but it does not by itself show that Lilly shares are cheap. A dated stock price, earnings multiple and explicit cash-flow assumptions are still needed to establish undervaluation.
What Eli Lilly is forecasting for 2026
In its August 5, 2026 second-quarter release, Eli Lilly raised full-year revenue guidance to $85.0 billion–$87.0 billion. The company had initially guided to $80 billion–$83 billion in February and later raised that range to $82 billion–$85 billion before the latest increase.
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| Metric | Latest 2026 figure | Context |
|---|---|---|
| Revenue | $85.0 billion–$87.0 billion | Full-year company guidance updated August 5, 2026 |
| Non-GAAP EPS | $35.50–$36.50 | Updated full-year guidance |
| Performance margin | 49.0%–50.5% | Raised from the previous 47.0%–48.5% range |
| Q2 revenue | $22.974 billion | Up 48% from $15.558 billion in Q2 2025 |
Chief executive David A. Ricks characterized the quarter this way: “Lilly’s momentum continues, as we delivered 48% revenue growth and raised our full-year guidance.” That is management’s description of operating performance, not an independent assessment of the shares’ value.
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Volume is expanding rapidly
Worldwide volume rose 60% in the second quarter, with Mounjaro and Zepbound providing the main contribution. Key Products revenue reached $15.7 billion, while Lilly also reported growth in its immunology, oncology and neuroscience products.
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The mix matters. A 60% volume increase is powerful evidence of demand, but worldwide realized prices declined 13%, limiting how much of that demand converted into reported sales growth. In the United States, realized prices fell 3%; Lilly said the decline would have been approximately 9% excluding rebate and discount adjustments.
Pipeline progress could extend the obesity franchise
Lilly reported positive Phase 3 results for three additional retatrutide trials in obesity and said it had a complete clinical package to support registration submissions in obesity, sleep apnea and knee osteoarthritis pain. The company plans a U.S. biologics license application submission in the first quarter of 2027.
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Those milestones describe a potential future product, not 2026 revenue. Approval, labeling, manufacturing scale-up, reimbursement and commercial uptake remain uncertain, so retatrutide should be treated as optionality rather than included sales.
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Manufacturing investment is aimed at demand, but raises near-term spending
Lilly committed another $4.5 billion to expand manufacturing in Indiana. More capacity could help the company supply Mounjaro and Zepbound demand and launch future medicines, but Lilly also expects meaningfully higher near-term capital expenditures.
Why the revenue forecast does not prove the stock is undervalued
Revenue guidance measures expected business activity; it does not reveal what investors have already paid for that growth. The available company filings do not establish a publication-date LLY share price, forward price-to-earnings multiple, discounted-cash-flow value or independent fair-value estimate. Without those inputs, the claim that the shares “still look undervalued” remains unverified.
Price and reimbursement may absorb part of the growth
The second-quarter figures show the tension clearly: volume rose 60%, while realized prices fell 13% worldwide. Lilly said uptake from expanded Medicare GLP-1 Bridge access was unknown. It also warned that U.S. policy initiatives and international reference-pricing arrangements could affect price, demand, access, competition and revenue.
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Reported EPS includes sizable business-development charges
Lilly increased underlying non-GAAP EPS guidance by $2.78 at the midpoint. However, it reported $3.03 per share of acquired in-process research and development charges from recent business-development activity. Those charges more than offset the underlying midpoint increase in the updated reported range, so investors should distinguish recurring operating earnings from acquisition-related items.
Debt and capital intensity affect what reaches shareholders
At June 30, 2026, Lilly reported total debt of $54.9 billion, $12.4 billion higher than at December 31, 2025. Manufacturing expansion and other investment can support future sales, but they also require capital and can reduce near-term free cash flow or increase financing risk.
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How to test an undervaluation claim
A defensible valuation requires more than extrapolating the $87 billion revenue ceiling. Use a dated quote and make each assumption visible:
- Record the price and date. Use the closing share price on the publication date and state whether the calculation uses basic or diluted shares.
- Calculate forward valuation. Divide the share price by the relevant forward EPS estimate, making clear whether EPS is reported or adjusted for acquired in-process research and development.
- Compare valuation with growth. Test whether the forward earnings multiple is reasonable relative to expected EPS growth rather than treating revenue growth as a substitute for earnings growth.
- Build a cash-flow case. State assumptions for volume growth, price erosion, gross and operating margins, taxes, capital expenditures, working capital, discount rate and terminal growth.
- Run downside sensitivities. Model slower Mounjaro and Zepbound volume growth, continued price pressure, weaker reimbursement, retatrutide approval or launch delays, higher manufacturing costs and additional debt.
Only after those steps can an investor compare an estimated per-share value with the dated market price. Strong growth can raise intrinsic value while a stock remains expensive if the market price already discounts near-perfect execution.
What to monitor after the guidance increase
- Whether Mounjaro and Zepbound volume continues to offset realized-price declines.
- Changes in U.S. rebates, discounts, Medicare access and international reference-pricing policy.
- Cash flow after the Indiana expansion and other manufacturing projects.
- Debt growth and the treatment of acquired in-process research and development in earnings analysis.
- Retatrutide’s remaining regulatory steps, the planned first-quarter 2027 U.S. submission and eventual launch economics.
- Whether growth broadens beyond the two leading obesity and diabetes products.
Bottom line
Lilly’s $85 billion–$87 billion 2026 revenue outlook and 48% Q2 growth provide a strong operating-growth argument. They do not establish that the stock is undervalued. The investment conclusion depends on the price investors pay for that growth, the durability of volume after pricing pressure, the cost of capacity and acquisitions, and the probability-adjusted value of the pipeline. Until a current quote and transparent valuation model are added, “undervalued” is a thesis to test—not a conclusion demonstrated by the revenue guidance.
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