LLY is undervalued (fair value $1,494 vs price $1,153) due to strong weight-loss drug momentum and FCF growth; expected to rise ~30% in 12-18 months.

We will move from a company with a market value of about one billion dollars to a company with a market value of more than one trillion dollars, which is Eli Lilly. I don't need to explain what Eli Lilly benefits from; the positive momentum is of course the weight loss treatments that have created a sales boom, which reminds me of the sales boom of artificial intelligence companies like Nvidia and Micron.

Eli Lilly's sales are soaring, and its free cash flow is booming. I estimate the company's free cash flow will grow from $12 billion in 2025 to over $77 billion by 2032. This results in an estimated fair value for this stock of $1,494 compared to its current market price of $1,153.

Eli Lilly does not simply capitalize on current consumer demand . In fact, it is expanding its availability to serve customers with more specific needs. This category is likely to continue growing over several years, and Eli Lilly is in an excellent position to benefit from increased sales.

Furthermore, this company has decades of experience in researching and developing treatments that consumers are willing to pay for. It is reasonable to assume that over the next 10, 20, and 30 years it will introduce more treatments from its robust product line, which will replace sales of health treatments once that category is saturated.

I have calculated an increase of approximately 30% for Eli Lilly over the next twelve to eighteen months. I own Eli Lilly shares in my portfolio, and I am interested in adding more of them.