Denmark-based Novo Nordisk A/S (NVO) is the drug company behind Wegovy (or semaglutide, its GLP-1 hormone-mimicking drug). Shares flew high when Wegovy was the drug to beat, but they have retreated somewhat due to competition from Eli Lilly and Co.’s (LLY) Zepbound. Don’t fear — there’s plenty of room for both drugs, maintains Nancy Zambell, editor-in-chief of Cabot Money Club.
The global weight loss market, currently valued at some $163 billion, is exploding. Experts believe it will grow to $362 billion in just ten years!
That’s because obesity has more than doubled since 1990. And it has been rapidly expanding in the past few decades, from 30.5% of the world population in 1999 to more than 42% today. What’s more, more than 22 million adults suffer from severe obesity (a body mass index of 40 or higher).
Novo Nordisk A/S (NVO)
Even if you are just a few pounds overweight, the older you get, the harder it is to lose. Once you become obese, it’s even more challenging.
Enter these weight-loss drugs. They seem to be miracle workers, as I know quite a few people who have lost 50, 60, even 70 pounds in six months or less. Those results are ratcheting up interest in the weight-loss drugs, making their shareholders happy as their stock prices rise with their fortunes.
As I mentioned, Novo pulled back in late 2024 due to increasing competition and softer revenue in the third quarter than Wall Street had expected. Additionally, the company just announced that it is investing $1.2 billion in a new production facility in Odense, Denmark, for the production of drugs used to treat rare diseases, like hemophilia, which are otherwise neglected.
But Novo is not a one-drug wonder. Analysts expect 20% or higher annual growth from the company for the next few years. Earnings estimates have been rising in the past couple of months, with analysts expecting the company to earn $3.24 per share this year.
Double-digit sales ahead and the pullback in the stock make Novo a screaming buy.
