{"id":24103,"date":"2023-10-03T18:05:45","date_gmt":"2023-10-03T18:05:45","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/why-the-weight-loss-drug-hype-looks-overdone\/"},"modified":"2023-10-03T18:05:46","modified_gmt":"2023-10-03T18:05:46","slug":"why-the-weight-loss-drug-hype-looks-overdone","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=24103","title":{"rendered":"Why the Weight-Loss Drug Hype Looks Overdone"},"content":{"rendered":"
\n
\n

<\/p>\n

\n
<\/div>
\n

Person with a Dexcom g6 glucose-monitoring system<\/h4>\n


\n Catherine Ivill\/Getty Images
\n <\/span>
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

Perhaps the market\u2019s latest weight-loss craze has played out.<\/p>\n

The stock market\u2019s profile has been changed dramatically by weight-loss drugs such as
\n Novo Nordisk
\n \u2018s (ticker: NVO) Wegovy. Novo and weight-loss rival
\n Eli Lilly
\n (LLY) have become the sexiest stocks, while shares of diabetes and sleep-apnea remedies have been bounced from the party.<\/p>\n

\n

In recent days, Wall Street analysts speculated that a world slimmed by the so-called GLP-1 drugs would be bullish for airlines such as
\n United Airlines Holdings
\n (ticker: UAL)\u2014as lighter passengers save fuel\u2014and bearish for restaurant plays such as the software vendor
\n Toast
\n (TOST)\u2014as customers eat out less.<\/p>\n

Yes, the GLP-1 trade seems overdone, for now.<\/p>\n

That\u2019s the thinking of Jefferies analyst Matt Taylor, who upgraded his rating Monday on insulin pump maker
\n Insulet
\n (PODD) from Hold to Buy\u2014saying that the stock\u2019s 50% drop since May has trimmed its handsome valuation to levels that now account for GLP-1 impact on diabetes prevalence. He still sees plenty of opportunity for Insulet and its pump rival <\/p>\n

Tandem Diabetes Care (TNDM), as well as for glucose-monitor maker
\n DexCom
\n (DXCM), so he reiterated his Buy ratings on the latter two names.<\/p>\n

Insulet stock closed up 3.5% Monday, to $165.56, amid a flat market. Tandem stock was up 5.9%, to $21.99.<\/p>\n

As Barron\u2019s<\/em> discussed in a September cover story, the profound benefits of GLP-1 drugs such as Novo\u2019s Ozempic and Lilly\u2019s Mounjaro have captured Wall Street\u2019s imagination. The GLP-1 craze has also hammered once-popular stocks like Insulet and DexCom.<\/p>\n

A doctor survey convinced Jefferies\u2019 Taylor that lots of patients will continue to develop Type-2 diabetes in the coming years, with enough progressing to insulin use to keep Insulet and Tandem growing apace.<\/p>\n

\u201c[Insulet\u2019s] growth opportunity will not be materially crimped by GLP-1 or other weight-loss-drug use,\u201d said Taylor, in Monday\u2019s upgrade. He thinks that when investors see pumps sales rising unabated, Insulet stock will rise from its recent levels of around $164, to $240.<\/p>\n

Taylor\u2019s price targets entail pretty high multiples for his stocks. His $240 target for Insulet is 113 times his forecast for 2024 earnings per share of $2.12. His DexCom target of $155 is 99 times his 2024 estimate for earnings of $1.57 a share. It\u2019s clear that medical-device analysts like him are gaining heart after the GLP-1 beating suffered by their sector this summer.<\/p>\n

The GLP-1 drop in medtech stocks \u201cis probably overdone,\u201d wrote Morgan Stanley analyst Patrick Wood in a recent note. If as many as 30% of Type-2 diabetes patients adopt GLP-1 drugs by 2027, Wood\u2019s modeling foresees just a 4% decline in those that need insulin. Still, he thinks it too early to upgrade his ratings on DexCom and Insulet from Equal Weight. <\/p>\n

GLP-1 drugs work, in part, by quieting hunger signals in the brain. The drugs\u2019 effect on Wall Street\u2019s brain have been in evidence this past week.<\/p>\n

On Monday, Mizuho analyst Dan Dolev cut his rating on the restaurant software firm Toast to Neutral from Buy. His downgrade of the $18 stock was driven primarily by his observation that volumes are slowing at Toast\u2019s customers, and his worry about Toast\u2019s loans to restaurants.<\/p>\n

But the Mizuho analyst worries that GLP-1 drugs will become a drag on the restaurant industry. \u201cLonger term, we believe the rise of GLP-1 drugs such as Ozempic for Type-2 diabetes & weight loss could lower restaurant spend,\u201d wrote Dolev.<\/p>\n

Last week, Jefferies tasked its entire research team to consider the implications of a slimmer society from GLP-1s. The Thursday report generated some headlines, with its speculations that airlines could benefit, while industries such as food packaging could suffer.<\/p>\n

Airlines biggest expense is fuel, noted Jefferies analyst Sheila Kahyaoglu. If every passenger dropped 10 pounds, a carrier such as United could save 1,800 pounds per flight. That would save $80 million a year at current fuel prices and would boost United\u2019s earnings by 2%, or 20 cents a share.<\/p>\n

Meanwhile, her colleague Phil Ng speculated that the paper and packaging companies he covers could see reduced demand from food service customers, if GLP-1 curb America\u2019s appetite.<\/p>\n

In the end, however, neither of the Jefferies analysts changed their views on their sectors, after considering the implications of GLP-1 use.<\/p>\n

For most stocks, perhaps the implications of widespread weight loss have been priced-in.<\/p>\n

Write to Bill Alpert at william.alpert@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock market\u2019s profile has been changed dramatically by weight-loss drugs such as Novo Nordisk \u2018s (ticker: NVO) Wegovy. Novo and weight-loss rival Eli Lilly (LLY) have become the sexiest stocks, while shares of diabetes and<\/p>\n","protected":false},"author":1,"featured_media":24104,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-24103","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nWhy the Weight-Loss Drug Hype Looks Overdone | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/microloannexus.com\/?p=24103\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why the Weight-Loss Drug Hype Looks Overdone | Micro Loan Nexus\" \/>\n<meta property=\"og:description\" content=\"Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock\" \/>\n<meta property=\"og:url\" content=\"https:\/\/microloannexus.com\/?p=24103\" \/>\n<meta property=\"og:site_name\" content=\"Micro Loan Nexus\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-03T18:05:45+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-03T18:05:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/10\/1696356345_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/microloannexus.com\/?p=24103#article\",\"isPartOf\":{\"@id\":\"https:\/\/microloannexus.com\/?p=24103\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a\"},\"headline\":\"Why the Weight-Loss Drug Hype Looks Overdone\",\"datePublished\":\"2023-10-03T18:05:45+00:00\",\"dateModified\":\"2023-10-03T18:05:46+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/microloannexus.com\/?p=24103\"},\"wordCount\":741,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/microloannexus.com\/#organization\"},\"articleSection\":[\"Investing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/microloannexus.com\/?p=24103#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/microloannexus.com\/?p=24103\",\"url\":\"https:\/\/microloannexus.com\/?p=24103\",\"name\":\"Why the Weight-Loss Drug Hype Looks Overdone | Micro Loan Nexus\",\"isPartOf\":{\"@id\":\"https:\/\/microloannexus.com\/#website\"},\"datePublished\":\"2023-10-03T18:05:45+00:00\",\"dateModified\":\"2023-10-03T18:05:46+00:00\",\"description\":\"Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock\",\"breadcrumb\":{\"@id\":\"https:\/\/microloannexus.com\/?p=24103#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/microloannexus.com\/?p=24103\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/microloannexus.com\/?p=24103#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/microloannexus.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Why the Weight-Loss Drug Hype Looks Overdone\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/microloannexus.com\/#website\",\"url\":\"https:\/\/microloannexus.com\/\",\"name\":\"Solutions For Real\",\"description\":\"Latest Finance News and Updates\",\"publisher\":{\"@id\":\"https:\/\/microloannexus.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/microloannexus.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/microloannexus.com\/#organization\",\"name\":\"Solutions For Real\",\"url\":\"https:\/\/microloannexus.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png\",\"contentUrl\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png\",\"width\":690,\"height\":64,\"caption\":\"Solutions For Real\"},\"image\":{\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png\",\"contentUrl\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/microloannexus.com\"],\"url\":\"https:\/\/microloannexus.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why the Weight-Loss Drug Hype Looks Overdone | Micro Loan Nexus","description":"Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/microloannexus.com\/?p=24103","og_locale":"en_US","og_type":"article","og_title":"Why the Weight-Loss Drug Hype Looks Overdone | Micro Loan Nexus","og_description":"Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock","og_url":"https:\/\/microloannexus.com\/?p=24103","og_site_name":"Micro Loan Nexus","article_published_time":"2023-10-03T18:05:45+00:00","article_modified_time":"2023-10-03T18:05:46+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/10\/1696356345_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/microloannexus.com\/?p=24103#article","isPartOf":{"@id":"https:\/\/microloannexus.com\/?p=24103"},"author":{"name":"News Room","@id":"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a"},"headline":"Why the Weight-Loss Drug Hype Looks Overdone","datePublished":"2023-10-03T18:05:45+00:00","dateModified":"2023-10-03T18:05:46+00:00","mainEntityOfPage":{"@id":"https:\/\/microloannexus.com\/?p=24103"},"wordCount":741,"commentCount":0,"publisher":{"@id":"https:\/\/microloannexus.com\/#organization"},"articleSection":["Investing"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/microloannexus.com\/?p=24103#respond"]}]},{"@type":"WebPage","@id":"https:\/\/microloannexus.com\/?p=24103","url":"https:\/\/microloannexus.com\/?p=24103","name":"Why the Weight-Loss Drug Hype Looks Overdone | Micro Loan Nexus","isPartOf":{"@id":"https:\/\/microloannexus.com\/#website"},"datePublished":"2023-10-03T18:05:45+00:00","dateModified":"2023-10-03T18:05:46+00:00","description":"Person with a Dexcom g6 glucose-monitoring system Catherine Ivill\/Getty Images Perhaps the market\u2019s latest weight-loss craze has played out. The stock","breadcrumb":{"@id":"https:\/\/microloannexus.com\/?p=24103#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/microloannexus.com\/?p=24103"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/microloannexus.com\/?p=24103#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/microloannexus.com\/"},{"@type":"ListItem","position":2,"name":"Why the Weight-Loss Drug Hype Looks Overdone"}]},{"@type":"WebSite","@id":"https:\/\/microloannexus.com\/#website","url":"https:\/\/microloannexus.com\/","name":"Solutions For Real","description":"Latest Finance News and Updates","publisher":{"@id":"https:\/\/microloannexus.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/microloannexus.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/microloannexus.com\/#organization","name":"Solutions For Real","url":"https:\/\/microloannexus.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/","url":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png","contentUrl":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png","width":690,"height":64,"caption":"Solutions For Real"},"image":{"@id":"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/microloannexus.com\/#\/schema\/person\/image\/","url":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png","contentUrl":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png","caption":"News Room"},"sameAs":["https:\/\/microloannexus.com"],"url":"https:\/\/microloannexus.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts\/24103","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24103"}],"version-history":[{"count":1,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts\/24103\/revisions"}],"predecessor-version":[{"id":24105,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts\/24103\/revisions\/24105"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/media\/24104"}],"wp:attachment":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24103"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24103"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}