What Has Changed About Owning Eli Lilly Stock

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If you own Eli Lilly (LLY), you most likely bought into a drug research company that turns its lab work into medicines such as Mounjaro and Zepbound. The shares returned 75.3% in the year to October 30, 2026, against 11.3% for the S&P 500, and the company's third-quarter report on October 29 gave holders new financial accounts to read
. What do those accounts say about where Eli Lilly now puts its money?

Eli Lilly Now Spends More On Factories Than Research

Over the twelve months ended September 30, 2026, Eli Lilly's capital spending, the money it puts into plants and equipment, was $19.0 billion, against $15.4 billion for research and development. Research had been the larger twelve-month figure at every quarter end from December 2011 through June 2026. After 59 consecutive quarters, this is the first time since at least the end of 2011 that research has come second.

The latest quarter shows the change most clearly. During the third quarter alone, Eli Lilly spent $7.24 billion on capital projects, against $4.25 billion on research. Over the twelve months, capital spending exceeded research spending by an amount equal to 4.1% of revenue.

Why Is Eli Lilly Building So Many Factories?

Eli Lilly is building because management expects the company to keep growing. Management said the two plants it broke ground on, a $6.5 billion facility in Houston, Texas, and a second one in Richmond, Virginia, support its long-term growth outlook. Richmond is one of 10 new U.S. manufacturing sites the company has announced since 2020.

Management said Mounjaro and Zepbound, its weight-loss and diabetes drugs, combined for more than $16 billion of revenue in the third quarter, and it sees years of growth still ahead for that business.

Eli Lilly has not cut research while it builds. A year earlier, the company spent $12.6 billion on research and $9.63 billion on capital projects over twelve months, so research spending kept rising while capital spending roughly doubled.

What Eli Lilly's Factory Spending Means For Your Money

For a holder, the cost shows up in free cash flow, the cash left after capital spending. During the third quarter, Eli Lilly's cash from operations rose to $11.4 billion, up from $8.84 billion a year earlier. Because capital spending took more of that cash, free cash flow fell to $4.16 billion from $6.03 billion. Over the full twelve months, free cash flow grew to $11.7 billion from $6.44 billion, so the drop is in the latest quarter, not the full year.

Eli Lilly also owes more. Its net debt, total debt minus cash and short-term investments, was $44.6 billion at the end of September 2026, up from about $32.6 billion a year earlier. Against the company's market value, the debt is still small. Total debt, before cash is subtracted, equals 3.9% of that value, against 19.1% for the S&P 500.

Until the latest quarter, a holder could assume Eli Lilly's twelve-month research spending was larger than its capital spending. Over the latest twelve months, that is no longer true. For a holder, the spending is worth its cost only if Eli Lilly's sales keep growing enough to use the new plants. Twelve-month capital spending against research spending is the figure to watch when Eli Lilly reports again, on a fourth-quarter call that management said will come in January.

How To Act On LLY?

Not necessarily on Eli Lilly alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Eli Lilly is one. Over the five years to October 2026, its stock rose 482%, ahead of 57 of the 60 other companies in Pharmaceuticals, where the typical company fell 35%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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