Why Is Eli Lilly Valued So Much Higher Than Novo?
Eli Lilly is valued higher because it is growing far faster and taking the market, while Novo Nordisk is guiding to a decline. On early-October figures Lilly traded near 31.6 times forward earnings and Novo near 11.5, with Lilly worth about $1.03 trillion and Novo's US-listed shares about $166 billion. Lilly's second-quarter revenue rose about 48% while Novo's grew between 2% and 7% depending on the measure, and Novo expects 2026 sales to be flat to down 6%. A cheap multiple can be a fair price for shrinking earnings, so the gap says what investors expect, not what is right. This is analysis, not a recommendation.
How big is the valuation gap?
| Measure | Eli Lilly | Novo Nordisk | Source and date |
|---|---|---|---|
| Market value | About $1.03 trillion | About $166 billion (US-listed shares) | Investing.com, prices of October 1, 2026 |
| Forward P/E | 31.2x to 31.6x | 11.1x to 11.5x | Motley Fool and Investing.com, early October 2026 |
| Trailing P/E | 38.3x | 9.5x | Investing.com, twelve months to June 30, 2026 |
| Price to sales | 13.5x | 3.4x | Motley Fool, October 6, 2026 |
| Dividend yield | 0.6% | 4.8% | Motley Fool, October 6, 2026 |
| Free-cash-flow yield | 1.8% | 6.9% | Investing.com, October 2026 |
| Price change over one year | +41% | -34% | Investing.com, prices of October 1, 2026 |
Sources differ on forward multiples depending on the earnings basis and date: 24/7 Wall St. quotes about 24x for Lilly and 12x for Novo. Whatever the basis, Lilly is valued at two to three times Novo's earnings multiple. On this site's October 23 data Lilly's market value was $1.22 trillion at $1306.69.
Forward price-to-earnings ratios on Investing.com's basis, with prices of October 1, 2026.
Why does the market pay more for Lilly?
| Driver | Eli Lilly | Novo Nordisk |
|---|---|---|
| Latest quarterly revenue growth | About 48% (Q2 2026: $22.97 billion against $20.69 billion expected) | 2.1% reported, or 7% at constant currency (Q2 2026), with earnings down 20.6% |
| 2026 outlook | Revenue guidance raised twice to $85 billion to $87 billion | Guided to a 2026 change of 0% to minus 6%; analysts expect sales about 3% lower and earnings about 14% lower |
| Core products | Mounjaro $9.94 billion (+91%) and Zepbound $4.93 billion (+46%) in Q2 | Wegovy injection sales falling in the US, with a pill launched |
| Share of the GLP-1 market | More than 60%, outselling Novo by over two to one (one September analysis) | A shrinking share of the same market |
| Operating margin (Q2) | 54.2% | 41.3% (one source gives 45.4% on a different basis) |
| Pipeline news | Retatrutide, a next-generation drug, targeted for a US filing in Q1 2027 | CagriSema decision expected in Q4 2026, launch targeted for early 2027 |
Q2 2026 revenue growth as reported by 24/7 Wall St. on October 13 and 19, 2026. Novo's two figures use different measures, so both are shown.
The market is pricing a growth gap, not a quality gap. A company growing revenue near 48% can carry a higher multiple than one whose profit is shrinking, and the PEG ratio, which divides P/E by growth, is 0.41 for Lilly against 1.92 for Novo, so on growth-adjusted terms Lilly looks cheaper. What growth does a share price imply shows how to turn a price into a growth assumption.
Is Novo cheap, or a value trap?
A low multiple can mean a bargain or a business in decline, and both readings are open for Novo. The case that it is cheap is its low earnings multiple, a dividend yield near 4.8% and a free-cash-flow yield near 7%. The case that it is a trap rests on shrinking earnings, a planned cut of about 50% in the Wegovy list price from January 1, 2027, and a US launch delayed by remediation at a production site for another product, Denecimig, which Novo says does not change its 2026 outlook.
Whether a low multiple is deserved depends on whether earnings stabilise. How to check if a stock is a value trap lists the tests. Novo trades in Copenhagen with a US-listed ADR and is not among the stocks this site tracks, so there is no Novo page here to compare.
What could close the gap?
| Could narrow the gap | Could widen it |
|---|---|
| Novo's pill and CagriSema win share, and the 2027 price cut lifts volume | Lilly's next drugs and oral product keep taking share |
| Lilly's realised US prices keep falling (down 9% to 13% in Q2 depending on the source) | Lilly holds growth near current levels while earnings rise |
| Medicare coverage at $50 a month broadens demand for both | Pricing deals cut the profit per patient |
| Lilly's growth slows toward a multiple more like other large drug makers | Novo's earnings keep falling through 2026 and 2027 |
Novo's next scheduled report is for nine months on November 4, 2026. Lilly's next quarterly report will show whether growth near 48% holds.
How does Lilly look on this site's checks?
From the weekly data of October 23, 2026, on the Eli Lilly stock page:
| Measure | LLY | What it tells you |
|---|---|---|
| Price | $1306.69 | At its 52-week high of $1,311.75 |
| Trailing / forward P/E | 45.6 / 26.3 | Above this site's limit of 25 on trailing earnings |
| Price to sales / price to book | 15.3 / 35.9 | Both above this site's limits of 7 and 8 |
| Revenue growth (trailing year) | +49.6% | The strongest of the 15 pharma and biotech stocks tracked here |
| Free-cash-flow yield | 1.1% | The lowest of the same 15 |
| Value filters passed | 3 of 8 | Buffett-style 5 of 8 and Lynch-style 0 of 5 |
| Growth the price implies | More than 40% a year | Free cash flow per share would need to grow faster than 40% a year, fading to 2.5% by year 10 |
That last line is the other side of the valuation gap: Lilly's price already assumes growth of a kind very few companies sustain, so a large rise in earnings is expected and a miss would matter. Read what is margin of safety in investing for why a negative margin on a model that fades growth is not a verdict.
Sources
- Motley Fool: Eli Lilly vs. Novo Nordisk (October 6, 2026): multiples, yields and growth
- Investing.com: Eli Lilly vs. Novo Nordisk valuation gap and pairs trade framework (October 2, 2026): market values, PEG, share of market
- 24/7 Wall St.: Eli Lilly could have more room to grow than its valuation suggests (October 13, 2026): Q2 2026 results and pricing
- Ad-hoc-news: Novo Nordisk, a cheap multiple and a fast-selling pill (October 23, 2026): analyst expectations and CagriSema timing
- Eli Lilly on this site: price, ratios and filters, October 23, 2026
Figures come from secondary articles, and they disagree in places (Novo's quarterly growth, Lilly's price decline, forward multiples), so exact numbers should be checked against each company's own releases. This is educational content, not investment advice.
Lilly and Novo valuation FAQ
Why is Eli Lilly more expensive than Novo Nordisk?
Lilly's revenue grew about 48% in the second quarter while Novo's grew 2% to 7% and is guided flat to down in 2026, so the market pays more for Lilly's growth and share gains.
What are the P/E ratios of Lilly and Novo?
On early-October 2026 figures Lilly's forward P/E was about 31 to 32 and Novo's about 11 to 12. Trailing, Lilly was about 38 and Novo about 9.5.
Is Novo Nordisk undervalued?
A low multiple can mean undervalued or a business with shrinking earnings. Novo expects 2026 sales flat to down 6%, so the discount reflects real pressure, and the answer depends on whether earnings recover.
Which has the better dividend?
Novo's yield was about 4.8% against Lilly's 0.6% on Motley Fool's October 6, 2026 figures.
Does this site track Novo Nordisk?
No. This site tracks US-listed S&P 500 stocks, and Novo is a Danish company with a US-listed ADR, so Lilly has a page here and Novo does not.