Eli Lilly and Company (LLY): A Bull Case Theory 

We came across a bullish thesis on Eli Lilly and Company on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on LLY. Eli Lilly and Company’s share was trading at $1,039.51 as of January 27th. LLY’s trailing and forward P/E were 50.93 and 31.65 respectively according to Yahoo Finance.

Eli Lilly and Company discovers, develops, and markets human pharmaceuticals in the United States, Europe, China, Japan, and internationally. LLY presents a high-yield options opportunity through the sale of February $870 puts at a $6.60 premium, representing 1,170 contracts and a $101.8 million notional bet that the stock will remain above $870 through expiration. Trading around $1,042 as of January 20, 2026, the stock offers a compelling 16.5% margin of safety, meaning it would need to drop nearly $172 per share over the next 38 days before the trade incurs a loss.

This level aligns with a deep-value entry point that institutional investors would likely defend, given Lilly’s recent market capitalization surpassing $1 trillion. The trade is timed to capture the company’s Q4 2025 earnings report, expected February 5, 2026, with elevated implied volatility pricing in potential uncertainty. Selling the puts now allows the trader to benefit from an anticipated volatility collapse following the earnings release, potentially locking in profits well before expiration if guidance remains stable.

Analysts forecast a 40% year-over-year increase in EPS to roughly $7.50, supported by blockbuster drugs Mounjaro and Zepbound surpassing Keytruda in sales, making a 16% decline post-earnings highly unlikely. Additionally, momentum is supported by Lilly’s upcoming FDA decision on its obesity pill, orforglipron, in Q2 2026. The proximity of this potential multi-billion-dollar drug approval provides a technical floor for the stock in February, mitigating downside risk. Overall, this put-selling strategy leverages strong fundamentals, institutional support, and timing around earnings and drug catalysts, offering a high-probability, limited-risk trade with an attractive premium relative to exposure.

Previously, we covered a bullish thesis on Eli Lilly and Company (LLY) by Kontra in May 2025, which highlighted the company’s leadership in obesity and diabetes therapeutics, strong EPS growth, and a promising pipeline including orforglipron. LLY’s stock price has appreciated by 30.90% since our coverage. OppCost shares a similar thesis but emphasizes a high-yield put-selling strategy around Q4 2025 earnings and the upcoming FDA decision on orforglipron.

Eli Lilly and Company is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 114 hedge fund portfolios held LLY at the end of the third quarter which was 119 in the previous quarter. While we acknowledge the risk and potential of LLY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LLY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.