Why Novo Nordisk Stock Topped the Market on Thursday

What happened

The European pharmaceutical stock of the moment, Denmark’s Novo Nordisk (NVO 2.16%), had another sweet moment on Wall Street Thursday. The company, which has had a smashing success with its weight-loss drug Wegovy, saw its share price rise by over 2% on the day, thanks in no small part to an analyst’s price target increase. Novo Nordisk’s gain was in contrast to the S&P 500 index, which slumped by 0.3%.

So what

Powerful bank JPMorgan Chase was the entity doing the raising, in the persons of analyst Richard Vosser and his team.

Early Thursday morning, Vosser’s group replaced its fair value price on Novo Nordisk stock — it now believes it is worth 1,500 Danish kroner ($216) per share, well up from the previous 1,200 kroner ($173) estimate. JPMorgan Chase remains positive on Novo Nordisk, as it maintained its overweight (i.e., buy) recommendation on the pharmaceutical company. 

Much of the upward shift stemmed from a revision of the team’s estimate for the total obesity drug market. It’s now forecasting that this will balloon to $71 billion by 2032, with Novo Nordisk taking quite a chunk of the total.

Now what

Vosser and company wrote in the analyst note detailing the price target boost that Novo Nordisk boasts a “superior growth profile through to 2030, together with best-in-sector visibility over this growth.” They also opined that the company has several catalysts in front of it, including official Wegovy clinical trial data that will likely show reduced risk of heart attacks and strokes for the medicine’s users. 

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

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