When financial analysts update their estimates about what a hot stock is going to do, it can pay to listen. In that vein, Cantor Fitzgerald analyst Louise Chen raised her price target for Novo Nordisk (NVO 0.84%) on Tuesday, Feb. 20, stating that the biopharma's shares would soon trade at $140 -- a more than 16% increase over its current price near $120.
Though her price target is a bit higher than the consensus, it's far from being unreachable, and it is more likely than not that the company's stock will trade higher than it is today. To understand why that's the case, you need to know the importance of two words: Ozempic and Wegovy.
These medicines are selling out faster than they can be manufactured
Novo Nordisk's weight loss drug Wegovy and its type 2 diabetes drug Ozempic are now both household names. In 2023, sales of Ozempic totaled $13.9 billion, up 60% from a year prior, whereas Wegovy sales were $4.5 billion after rising by 407% in the same period. The two drugs are both so absurdly popular in the U.S. that they're considered to be in a state of shortage.
But this is just the beginning. The company is currently engaged in late-stage clinical trials to attempt to expand its market even further. It's also in the process of building a lot more manufacturing capacity to serve the existing level of demand, which is bullish.
It's clear that Novo Nordisk is nowhere near reaching the bottom of its markets with Wegovy and Ozempic. Furthermore, it's hard to see any major risks for it in 2024, and perhaps beyond. So, if you're looking for a biopharma stock that's going to be growing rapidly for quite some time, it's definitely worth thinking about buying.
