JP Morgan, Morgan Stanley, And Two Billionaires Are Drooling Over Viking Therapeutics… Should You?

With Ozempic turning all our favorite chubby celebrities into skinny supermodels, it’s no secret that weight-loss treatments are one of the hottest trends in 2024. 

Well, guess what? Viking Therapeutics just became the latest biotech to get all the attention after its stock surged 18% this week. But what’s really behind Viking’s sudden rise? Well, it’s more than just good timing.

What’s really driving the Viking's sudden rise? Well, one of their biggest rivals, Roche Holdings and their new weight-loss drug flunked some crucial lab tests, causing gastrointestinal issues and increased heart rates in test subjects. If you’re not a biotech investor, just know this is horrible news. So of course, investors panicked and Roche’s stock took a hit. Meanwhile, Viking’s weight-loss drug, VK2735, has made it through early trials, with none of those ugly side effects.

But the real advantage is it’s an oral drug. This gives it a serious edge over their rivals like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. Let’s be honest, nobody’s lining up for more injections, right? Popping a pill is way more appealing than getting stuck with a needle every week.

It’s not just reddit traders that are getting excited, billionaires are piling in. Jeff Yass from Susquehanna bought 1.1 million shares, and Israel Englander’s Millennium Management snatched up 326,000 more. When billionaires start betting big, it usually means there’s something cooking right?

(Source: Common Dreams)

Even Wall Street analysts are “glazing” (as the teenagers would say). Michael Ulz from Morgan Stanley slapped a $105 price target on Viking, hinting at a potential 67% upside. Over at JP Morgan, they’re just as optimistic, throwing an “overweight” rating on the stock.

But before you get all “take my money” on Viking, let’s get real for a second. They’re not raking in (any) cash just yet. In fact, their earnings per share (EPS) is still deep in the red, which is par for the course for a biotech company still playing the trial game. Sure, analysts think Viking could grab 10% of the $34 billion weight-loss market by 2030, but 2030? That’s practically the Jetsons' future. Are you really down to wait that long?

Here’s the bottom line: Without profits on the books yet, this is still a speculative play. If you’ve got the patience of a monk and the stomach for risk, Viking might be your jam. If you’re looking for fast returns, you might want to sit this one out until the cash starts rolling in.

Viking Therapeutics stock is up 265% year to date.

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Stock.News does not have positions in companies mentioned.