From Barchart:

Shares of U.S.-based Eli Lilly and Denmark’s Novo Nordisk have skyrocketed with the success of their weight-loss drugs. Both trade near record highs and have valuations at a significant premium. Lilly’s market value far exceeds Tesla’s at $719 billion, while Novo’s share price is about $550 billion. Market analysts expect Lilly’s revenue to grow 76% over the next three years to $60.39 billion, with similar expectations for Novo.

The rapid growth of Lilly and Novo is attributed to the wild success of their weight-loss drugs, sending their shares to stratospheric levels and putting them on par with some high-growth tech stocks. With retail and institutional investors predicting a burst in the obesity drug market, Lilly and Novo shares have been in high demand. Both companies’ valuation multiples are significantly higher than other healthcare peers and rival high-flying tech and growth stocks.

Experts point out that Eli Lilly and Novo Nordisk are growth stocks in the large-cap pharmaceutical space. With valuations that are reaching the levels of high-flying technology and growth stocks. Despite some PE ratios being higher for different companies, analysts are still optimistic about the success of the weight loss drugs.

Eli Lilly and Novo Nordisk experienced a surge in market value and will continue to bolster sales with newer weight-loss drugs. Retail interest in Lilly has significantly grown, but experts argue that the future of the companies relies more than their potential success in the obesity drug market. Risk factors such as production costs and changing market prices could derail recent valuations.

Analysts predict a 68% rise in Novo Nordisk’s revenue over the next three years, boosting their market capitalization. Meanwhile, experts are anticipating that Eli Lilly’s market capitalization will also likely grow by 7.4%. Despite the impressive growth, some experts have expressed skepticism in placing the sustainability of the rising shares, pointing to the uncertainty with the total addressable market in the coming years.



Read more: GRAPHIC-Eli Lilly, Novo Nordisk get growth stock status on weight-loss drug boost