LLY Value Scorecard - Lilly (Eli)

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

43/60

moderate value score

Earnings & returns

EPS Trend

4/5

Diluted EPS: $6.57 (2022), $5.80 (2023), $11.71 (2024), $22.95 (2025). It rose every year but one and ended above 2022; the framework scores that as 4.

ROE Trend

5/5

ROE (net income / common equity): 58.6% (2022), 48.6% (2023), 74.2% (2024), 77.8% (2025). Median 66.4%, lowest 48.6%; the framework scores a median above 20% as 5.

ROIC

5/5

ROIC of 34.5%: earnings before interest and taxes of $26.63B (pre-tax income $25.73B plus interest expense $895.00M; the 10-K's financial data has no standard operating income figure) divided by $77.25B of capital (total assets $112.48B minus current liabilities $35.23B), fiscal year to Dec 31, 2025, as filed in the 10-K (SEC EDGAR). The framework scores above 20% as 5.

Profit Margins

5/5

Net margin of 33.5%; the framework scores above 20% as 5; gross margin 83.4%, operating margin 54.2%.

Balance sheet & cash

Debt-to-Equity

2/5

Debt-to-equity of 1.62; the framework scores 1.5-2.5 as 2 (total debt $54.91B, total cash $8.95B).

Free Cash Flow

4/5

Free cash flow (operating cash flow minus capital expenditure): $4.60B (2022), -$3.15B (2023), $414.00M (2024), $5.96B (2025). It rose every year but one and ended above 2022; the framework scores that as 4.

Retained Earnings

5/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $10.04B (2022), $10.31B (2023), $13.54B (2024), $24.47B (2025). It rose every year; the framework scores that as 5.

Valuation models

Graham IV

4/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $29.79 x (8.5 + 2 x 20.0) x (4.4 / 4.5) = $1,412.71 (EPS CAGR 98.9% capped at 20%). Current price $1,257.03; price is 11.0% below the model value.

DCF Value

1/5

FCF/share = $12.415, stage 1 growth = 20.0% (revenue CAGR 38.2% capped at 20%) for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $81.20, PV of terminal value = $282.24, DCF value = $363.44. Current price $1,257.03; price is 245.9% above the model value.

Margin of Safety

3/5

Graham value $1,412.71 (price is 11.0% below the model value); DCF value $363.44 (price is 245.9% above the model value).

Price-to-Book

1/5

P/B of 33.08; the framework scores above 5.0 as 1.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 7 of 10 years (2016-2025); lowest 8.3%, highest 34.5%.

Gross margin, each year

Between 73.1% and 83.0% over 10 years (a range of 9.9 points).

Competition, in the company’s own words · 10-K filed Feb 12, 2026

Our products compete globally with many other pharmaceutical products in highly competitive markets. Important competitive factors include effectiveness, safety, availability, ease of use, patient preference, and overall experience; formulary placement, price, payer coverage and reimbursement rates, and demonstrated cost-effectiveness; regulatory approvals; marketing effectiveness; and research and development of

The opening of the company’s “Competition” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. For a year whose 10-K financial data has no standard operating income figure, earnings before interest and taxes (pre-tax income plus interest expense) is used. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

4/5

Capital allocation, 2022-2025: dividends or buybacks paid in every year (pass); $26.53B paid out against $7.83B of free cash flow (fail: paid out more than free cash flow); total debt $16.24B to $42.50B, up 161.7%, 1.3x EBITDA (pass: at most 2x EBITDA); shares outstanding 0.95B to 0.89B, down 5.8% (pass). 3 of 4 tests passed; the framework scores that as 4.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $29.79, g = 20.0%, Y = 4.5
    g capped at 20.0% (3-year EPS CAGR was 98.9%)
    IV = $1,412.71
    Current price $1,257.03 vs Graham value $1,412.71 — price is 11.0% below the model value.

  DCF:
    FCF/share = $12.415
    Stage 1 growth = 20.0% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
    Stage 1 g capped at 20.0% (3-year revenue CAGR was 38.2%)
      Y1: $14.898 → PV $13.543
      Y2: $17.877 → PV $14.774
      Y3: $21.453 → PV $16.118
      Y4: $25.743 → PV $17.583
      Y5: $30.892 → PV $19.181
    Stage 1 PV sum = $81.20
    Terminal value at end of Y5 = $454.55
    PV of terminal value = $282.24
    DCF value = $363.44
    Current price $1,257.03 vs DCF value $363.44 — price is 245.9% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $1257.03. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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