LLY · Forward model · Ricks case
The Ricks case, 20 quarters out
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Eli Lilly operates as a SINGLE reportable segment. The five verticals here are the ASC 606 disaggregation of revenue by therapeutic area that Lilly publishes in the 10-Q and 10-K revenue note - Cardiometabolic Health, Oncology, Immunology, Neuroscience and Other - and nothing finer is modelled, because nothing finer is disclosed. Revenue splits; profitability does not. Eight of the ten quarters are read directly from three-month columns in five 10-Qs; the two fourth quarters are derived as full year minus nine months and are marked estimated on every line. The five verticals sum to the reported $22,974M of 2026 Q2 revenue exactly, with no plug, and reconcile within $1.1M of rounding in all ten quarters. History stops at 2024 Q1 on purpose: the 2024-vintage filings label the largest line 'Diabetes and obesity' and their area lines do not sum to consolidated revenue, so splicing 2023 on would import a definitional break into exactly the place the seasonal factors are read from. No per-therapeutic-area margin exists in any filing, so all five verticals carry the same consolidated 52.2% EBITDA margin: the guided FY2026 non-GAAP performance-margin midpoint of 49.75%, which is the company's own gross margin less R&D less MS&A, plus 2.4 points of depreciation and amortisation from the H1 cash-flow statement. The 8.0% corporate overhead is the acquired in-process R&D charge treated as an ongoing cost of the pipeline rather than a one-off; it is an assumption, calibrated so that the first projected quarter's 26.2% FCF margin sits just above the 25.2% Lilly actually printed in H1 2026, and it is far below the 12.1% of revenue that 2026 Q2's own $2,776M charge represented. Capex intensity starts at the disclosed H1 2026 rate of 12.3% and glides toward 8.0%; the $4.5 billion Indiana manufacturing commitment is NOT added as a separate capital programme because it is already inside that capex rate and would otherwise be counted twice. Tax is the guided 18-19% non-GAAP rate at 18.5%, applied unlevered - interest is not deducted from cash flow because the $45.96 billion of net debt is deducted from enterprise value instead. The base case does NOT match the FY2026 revenue guide and does not pretend to: it prints $89.8 billion against the guided $85.0-$87.0 billion, and the reason is arithmetic rather than optimism - holding every one of the five lines at zero deseasonalised growth still produces $87.9 billion, because the guided range implies an H2 below the Q2 run rate that the deseasonalised series has never printed. The bear case is where guidance is taken literally, and it lands at $85.9 billion.
The CEO's own framing, priced. Growth continues AND the company keeps spending into it - new manufacturing capacity, and pipeline bought through business development rather than harvested. In model terms that is trend growth 0.6 points a quarter above base with 2.5 points less margin, because the acquired in-process R&D charge that funds the pipeline is a permanent cost rather than the one-off it is presented as. It is worth more than base and less than bull, and it is the only case here in which faster growth costs something.
Latest: $38.42B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $8.77B |
| 2024Q2 | $11.30B |
| 2024Q3 | $11.44B |
| 2024Q4 | $13.53B |
| 2025Q1 | $12.73B |
| 2025Q2 | $15.56B |
| 2025Q3 | $17.60B |
| 2025Q4 | $19.29B |
| 2026Q1 | $19.80B |
| 2026Q2 | $22.97B |
| 2026Q3E | $22.91B |
| 2026Q4E | $24.52B |
| 2027Q1E | $22.53B |
| 2027Q2E | $25.83B |
| 2027Q3E | $25.92B |
| 2027Q4E | $27.61B |
| 2028Q1E | $25.29B |
| 2028Q2E | $28.89B |
| 2028Q3E | $28.90B |
| 2028Q4E | $30.69B |
| 2029Q1E | $28.05B |
| 2029Q2E | $31.97B |
| 2029Q3E | $31.91B |
| 2029Q4E | $33.82B |
| 2030Q1E | $30.87B |
| 2030Q2E | $35.13B |
| 2030Q3E | $35.01B |
| 2030Q4E | $37.06B |
| 2031Q1E | $33.80B |
| 2031Q2E | $38.42B |
What drives each segment
Cardiometabolic Health
Growth pathTirzepatide - Mounjaro and Zepbound - plus the legacy diabetes base and the first quarter of oral orforglipron (Foundayo). At $18,353M it was 79.9% of 2026 Q2 revenue and grew 61.8% year over year while the other four areas together grew 8.2%. Lilly publishes no prescriptions, doses or patients by therapeutic area, so a growth driver on the disclosed revenue line is the only shape the disclosure supports.
Latest: $31.27B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $5.49B |
| 2024Q2 | $7.51B |
| 2024Q3 | $7.41B |
| 2024Q4 | $9.11B |
| 2025Q1 | $9.21B |
| 2025Q2 | $11.34B |
| 2025Q3 | $13.18B |
| 2025Q4 | $14.49B |
| 2026Q1 | $15.76B |
| 2026Q2 | $18.35B |
| 2026Q3E | $18.07B |
| 2026Q4E | $19.20B |
| 2027Q1E | $18.12B |
| 2027Q2E | $20.70B |
| 2027Q3E | $20.56B |
| 2027Q4E | $21.75B |
| 2028Q1E | $20.44B |
| 2028Q2E | $23.26B |
| 2028Q3E | $23.03B |
| 2028Q4E | $24.29B |
| 2029Q1E | $22.77B |
| 2029Q2E | $25.84B |
| 2029Q3E | $25.53B |
| 2029Q4E | $26.87B |
| 2030Q1E | $25.15B |
| 2030Q2E | $28.50B |
| 2030Q3E | $28.11B |
| 2030Q4E | $29.55B |
| 2031Q1E | $27.62B |
| 2031Q2E | $31.27B |
Assumptions & reasoning
- Seasonality [0.938, 1.038, 1.000, 1.027] is the brief's OLS of log revenue on a time trend plus calendar-quarter dummies over 2024 Q1-2026 Q2, re-centred to mean 1.0. Read it as 'Q1 about 6% below trend, Q4 about 3% above': the CFO named both mechanisms on the call, European Q3 holidays and US type 2 diabetes Q4 seasonality. The Q2 factor is the least reliable, moving 0.053 between the two eight-quarter windows against a 0.038 deviation from 1.0.
- With seasonality on, growthQoQ is a deseasonalised trend rate and not the sequential print. The model's first two projected quarters for this line are $17,964M and $18,975M, which is +36.3% and +30.9% year over year against the reported $13,177.9M of 2025 Q3 and $14,492.1M of 2025 Q4.
- Foundayo (orforglipron) booked $98M in 2026 Q2, its first partial quarter, and is reported inside this line in the 10-Q disaggregation. It is not split out as its own vertical because doing so would require inventing nine quarters of history it does not have.
- Trulicity is in structural decline - FY2023 $7,132M, FY2024 $5,254M, FY2025 $4,276M - and is being cannibalised by Mounjaro from inside the same line.
Oncology
Growth pathVerzenio plus a broadening portfolio - Jaypirca, Retevmo and the 2026 launch Inluriyo. At $2,570M it is 11.2% of revenue and grew 6.5% year over year, so it is ballast rather than growth: it funds the pipeline without changing the terminal value.
Latest: $3.72B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $1.81B |
| 2024Q2 | $2.16B |
| 2024Q3 | $2.23B |
| 2024Q4 | $2.55B |
| 2025Q1 | $1.95B |
| 2025Q2 | $2.41B |
| 2025Q3 | $2.41B |
| 2025Q4 | $2.61B |
| 2026Q1 | $2.27B |
| 2026Q2 | $2.57B |
| 2026Q3E | $2.62B |
| 2026Q4E | $2.92B |
| 2027Q1E | $2.36B |
| 2027Q2E | $2.80B |
| 2027Q3E | $2.85B |
| 2027Q4E | $3.16B |
| 2028Q1E | $2.55B |
| 2028Q2E | $3.02B |
| 2028Q3E | $3.07B |
| 2028Q4E | $3.40B |
| 2029Q1E | $2.75B |
| 2029Q2E | $3.25B |
| 2029Q3E | $3.30B |
| 2029Q4E | $3.65B |
| 2030Q1E | $2.95B |
| 2030Q2E | $3.48B |
| 2030Q3E | $3.54B |
| 2030Q4E | $3.91B |
| 2031Q1E | $3.15B |
| 2031Q2E | $3.72B |
Assumptions & reasoning
- Seasonality [0.876, 1.017, 1.016, 1.105] is the cleanest shape in the company: a 12% Q1 trough and a 10% Q4 peak, stable to within 0.023 across the two eight-quarter windows with residual noise of 0.022 log-points. It is consistent with US buy-and-bill oncology behaviour around benefit-year resets.
- Verzenio is flat to slightly down in the US - 2026 Q2 US revenue $845M against $929M a year earlier - with outside-US growth carrying the line.
- Inluriyo is a 2026 launch and booked $75M in the basis quarter, its second quarter of sales; it is inside this line, not broken out.
Immunology
Growth pathTaltz plus the Omvoh and Ebglyss launches. At $1,417M it is 6.2% of revenue and grew 12.9% year over year, the fastest of the non-cardiometabolic lines, and all of that growth sits in the launches rather than in Taltz.
Latest: $2.45B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $834M |
| 2024Q2 | $1.08B |
| 2024Q3 | $1.19B |
| 2024Q4 | $1.29B |
| 2025Q1 | $1.09B |
| 2025Q2 | $1.26B |
| 2025Q3 | $1.36B |
| 2025Q4 | $1.54B |
| 2026Q1 | $1.20B |
| 2026Q2 | $1.42B |
| 2026Q3E | $1.56B |
| 2026Q4E | $1.72B |
| 2027Q1E | $1.35B |
| 2027Q2E | $1.62B |
| 2027Q3E | $1.77B |
| 2027Q4E | $1.95B |
| 2028Q1E | $1.52B |
| 2028Q2E | $1.82B |
| 2028Q3E | $1.99B |
| 2028Q4E | $2.18B |
| 2029Q1E | $1.70B |
| 2029Q2E | $2.02B |
| 2029Q3E | $2.20B |
| 2029Q4E | $2.41B |
| 2030Q1E | $1.87B |
| 2030Q2E | $2.23B |
| 2030Q3E | $2.43B |
| 2030Q4E | $2.65B |
| 2031Q1E | $2.06B |
| 2031Q2E | $2.45B |
Assumptions & reasoning
- Seasonality [0.853, 0.991, 1.053, 1.123] is a 15% Q1 trough and a 12% Q4 peak, the classic US specialty-pharmacy gross-to-net pattern of a January deductible reset followed by fourth-quarter stocking. Window-to-window spread never exceeds 0.018 against factor deviations of up to 0.147.
- Taltz is flat year over year at $856M against $848M; the whole increase in the line is 'other immunology' at $561M against $408M, which is Omvoh and Ebglyss.
- The basis-quarter release records FDA approval of an every-eight-week Ebglyss maintenance dose, which supports the launch trajectory but is not separately quantified.
Neuroscience
Growth pathKisunla ramping inside a decaying legacy base. At $429M it is 1.9% of revenue, the smallest therapeutic line and the least consequential to the valuation, but it is the one line whose disclosed history is a launch curve rather than a business.
Latest: $713M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $389M |
| 2024Q2 | $340M |
| 2024Q3 | $352M |
| 2024Q4 | $394M |
| 2025Q1 | $272M |
| 2025Q2 | $344M |
| 2025Q3 | $316M |
| 2025Q4 | $459M |
| 2026Q1 | $382M |
| 2026Q2 | $429M |
| 2026Q3E | $449M |
| 2026Q4E | $468M |
| 2027Q1E | $485M |
| 2027Q2E | $502M |
| 2027Q3E | $518M |
| 2027Q4E | $533M |
| 2028Q1E | $548M |
| 2028Q2E | $562M |
| 2028Q3E | $576M |
| 2028Q4E | $589M |
| 2029Q1E | $602M |
| 2029Q2E | $615M |
| 2029Q3E | $627M |
| 2029Q4E | $639M |
| 2030Q1E | $652M |
| 2030Q2E | $664M |
| 2030Q3E | $676M |
| 2030Q4E | $688M |
| 2031Q1E | $700M |
| 2031Q2E | $713M |
Assumptions & reasoning
- Left ASEASONAL on the research brief's own diagnostics: residual noise of 0.110 log-points is the largest of any line and is of the same order as the apparent Q4 uplift, whose estimate moves from 1.234 to 1.190 between the two windows. Fitting a season here would be fitting the Kisunla ramp, not a repeating calendar shape.
- Kisunla grew from $49M in 2025 Q2 to $167M in 2026 Q2 while the rest of the line shrank, so the reported total understates the launch and overstates the base.
- Outside-US neuroscience revenue fell from $2,183M in FY2023 to $694M in FY2024 to $394M in FY2025, which is why the ten-quarter history for this line is not a stable base to extrapolate from.
Other
Growth pathCollaboration, royalty and non-therapeutic revenue. At $205M it is 0.9% of the company and lumpy by construction: it moves when contracts say it does, not when the calendar does, so it is modelled as close to flat.
Latest: $267M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $242M |
| 2024Q2 | $208M |
| 2024Q3 | $263M |
| 2024Q4 | $191M |
| 2025Q1 | $213M |
| 2025Q2 | $202M |
| 2025Q3 | $337M |
| 2025Q4 | $191M |
| 2026Q1 | $187M |
| 2026Q2 | $205M |
| 2026Q3E | $208M |
| 2026Q4E | $212M |
| 2027Q1E | $215M |
| 2027Q2E | $218M |
| 2027Q3E | $221M |
| 2027Q4E | $224M |
| 2028Q1E | $227M |
| 2028Q2E | $230M |
| 2028Q3E | $233M |
| 2028Q4E | $236M |
| 2029Q1E | $239M |
| 2029Q2E | $242M |
| 2029Q3E | $245M |
| 2029Q4E | $248M |
| 2030Q1E | $251M |
| 2030Q2E | $254M |
| 2030Q3E | $257M |
| 2030Q4E | $261M |
| 2031Q1E | $264M |
| 2031Q2E | $267M |
Assumptions & reasoning
- Left ASEASONAL on the brief's own diagnostics: the apparent Q3 factor of 1.33 rests on two observations, $262.8M in 2024 Q3 and $337.2M in 2025 Q3, and the Q1 factor moves 0.104 between the two windows - larger than three of the four factors' deviation from 1.0.
- The 2024-vintage 10-Q presented a narrower 'Other' line, $50.0M for 2024 Q2 against the restated $207.6M, and only the restated basis makes the five areas sum to reported consolidated revenue. Every figure here is on the restated basis.
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
The first half was flattered
- Aug 5, 2026 there were a few one-offs that we called out ... prior period adjustments that we had on our estimates for rebates and discounts in the U.S., including this quarter. Those, of course, we don't expect that will continue.
- Aug 5, 2026 Revenue guidance raised to $85 to $87 billion from $82 to $85 billion.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
The oral incretin ramp
- Aug 5, 2026 We're seeing week-to-week growth in overall prescriptions and uptake for Foundayo ... almost doubling the volume that we had just a month ago
- Aug 5, 2026 The major rollout for us OUS will happen in the beginning of 2027 with major launches.
- Aug 5, 2026 clinical data package is now complete to support global registrations for obesity, obstructive sleep apnea, and knee osteoarthritis pain, with plans to submit a Biologics License Application to the U.S. FDA in the first quarter of 2027
Ricks case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Ricks column is what happens if they are taken at face value.
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $122.88B |
| Terminal-year revenue | $144.29B |
| Terminal-year EBITDA | $60.17B |
| Exit multiple, on revenue | 7.0x |
| Terminal value | $1.01T |
| Discounted at 8.0% a year, terminal value becomes | $687.43B |
| Enterprise value | $810.31B |
| Net cash | -$45.96B |
| Equity value | $764.35B |
| Shares | 0.89B |
| Fair value per share | $855.29 |
| Against the current price of $1,176.10 | -27% |
8% discount rate: a large-cap pharma WACC, near-zero equity beta premium over the market offset by patent-cliff terminal risk. 6.0x exit EV/revenue is an assumption, not a comp-derived figure - comparable multiples were not verified in the research pass and must not be quoted as evidence. It is a de-rated large-cap pharma terminal multiple on the view that today's 13.5x EV to guided FY2026 revenue is a growth multiple unlikely to survive to 2031. On the model's terminal four quarters - $129.2bn of revenue and $57.1bn of EBITDA after the corporate overhead - 6.0x revenue is 13.6x EBITDA. The scenarios move it from 4.5x to 8.5x, and the exit multiple is the single largest lever in this model - larger than any plausible margin or growth change.
Read the other way round: at $1,176.10 the market is paying 9.9x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | Cardiometabolic Health | Oncology | Immunology | Neuroscience | Other | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 Q3E | $18.07B | $2.62B | $1.56B | $449M | $208M | $22.91B | +30% | $9.55B | $2.77B | $5.53B | +54 | $5.42B |
| 2026 Q4E | $19.20B | $2.92B | $1.72B | $468M | $212M | $24.52B | +27% | $10.22B | $2.91B | $5.96B | +51 | $5.73B |
| 2027 Q1E | $18.12B | $2.36B | $1.35B | $485M | $215M | $22.53B | +14% | $9.40B | $2.63B | $5.51B | +38 | $5.20B |
| 2027 Q2E | $20.70B | $2.80B | $1.62B | $502M | $218M | $25.83B | +12% | $10.77B | $2.97B | $6.36B | +37 | $5.89B |
| 2027 Q3E | $20.56B | $2.85B | $1.77B | $518M | $221M | $25.92B | +13% | $10.81B | $2.94B | $6.42B | +38 | $5.83B |
| 2027 Q4E | $21.75B | $3.16B | $1.95B | $533M | $224M | $27.61B | +13% | $11.51B | $3.08B | $6.87B | +38 | $6.12B |
| 2028 Q1E | $20.44B | $2.55B | $1.52B | $548M | $227M | $25.29B | +12% | $10.55B | $2.78B | $6.33B | +37 | $5.53B |
| 2028 Q2E | $23.26B | $3.02B | $1.82B | $562M | $230M | $28.89B | +12% | $12.05B | $3.14B | $7.26B | +37 | $6.23B |
| 2028 Q3E | $23.03B | $3.07B | $1.99B | $576M | $233M | $28.90B | +11% | $12.05B | $3.09B | $7.30B | +37 | $6.14B |
| 2028 Q4E | $24.29B | $3.40B | $2.18B | $589M | $236M | $30.69B | +11% | $12.80B | $3.25B | $7.79B | +37 | $6.42B |
| 2029 Q1E | $22.77B | $2.75B | $1.70B | $602M | $239M | $28.05B | +11% | $11.70B | $2.93B | $7.15B | +36 | $5.78B |
| 2029 Q2E | $25.84B | $3.25B | $2.02B | $615M | $242M | $31.97B | +11% | $13.33B | $3.30B | $8.18B | +36 | $6.49B |
| 2029 Q3E | $25.53B | $3.30B | $2.20B | $627M | $245M | $31.91B | +10% | $13.30B | $3.26B | $8.19B | +36 | $6.38B |
| 2029 Q4E | $26.87B | $3.65B | $2.41B | $639M | $248M | $33.82B | +10% | $14.10B | $3.41B | $8.71B | +36 | $6.65B |
| 2030 Q1E | $25.15B | $2.95B | $1.87B | $652M | $251M | $30.87B | +10% | $12.87B | $3.08B | $7.98B | +36 | $5.98B |
| 2030 Q2E | $28.50B | $3.48B | $2.23B | $664M | $254M | $35.13B | +10% | $14.65B | $3.48B | $9.11B | +36 | $6.69B |
| 2030 Q3E | $28.11B | $3.54B | $2.43B | $676M | $257M | $35.01B | +10% | $14.60B | $3.43B | $9.10B | +36 | $6.56B |
| 2030 Q4E | $29.55B | $3.91B | $2.65B | $688M | $261M | $37.06B | +10% | $15.46B | $3.60B | $9.66B | +36 | $6.83B |
| 2031 Q1E | $27.62B | $3.15B | $2.06B | $700M | $264M | $33.80B | +9% | $14.09B | $3.25B | $8.84B | +36 | $6.13B |
| 2031 Q2E | $31.27B | $3.72B | $2.45B | $713M | $267M | $38.42B | +9% | $16.02B | $3.67B | $10.07B | +36 | $6.85B |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Changed | Fair value then | Note |
|---|---|---|---|
| 2026-08-27 | all | $678.07 | Initial publication from the verified research brief on the 2026 Q2 basis quarter reported 5 August 2026. Five therapeutic-area verticals on the restated ASC 606 disaggregation, ten quarters of history, seasonality on cardiometabolic health, oncology and immunology only. |