Insulet and DexCom Stocks Show Promise Amidst Weight-Loss Drug Craze

The recent surge in popularity of weight-loss drugs, particularly GLP-1 drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro, has had a significant impact on the stock market. While shares of diabetes and sleep-apnea remedies have taken a hit, companies in the weight-loss drug sector, such as Novo Nordisk and Eli Lilly, have become the talk of Wall Street.

However, some analysts believe that the market’s obsession with GLP-1 drugs may be overdone. Jefferies analyst Matt Taylor, for instance, has upgraded his rating on insulin pump maker Insulet from Hold to Buy. Despite the recent drop in Insulet’s stock price, Taylor sees plenty of opportunity for growth, especially considering the continued prevalence of Type-2 diabetes and the need for insulin. He also maintains Buy ratings for Tandem Diabetes Care and glucose-monitor maker DexCom.

Taylor’s positive outlook on Insulet is based on the belief that the company’s growth potential will not be significantly impacted by the use of GLP-1 drugs or other weight-loss medications. He predicts that as pump sales continue to rise, Insulet’s stock could reach $240, up from its current levels of around $164.

Medical-device analysts, including Taylor, are gaining confidence after the beating suffered by the sector this summer due to the rise of GLP-1 drugs. Morgan Stanley analyst Patrick Wood suggests that the drop in medtech stocks may have been overdone, and he expects only a 4% decline in the number of patients needing insulin if 30% of Type-2 diabetes patients adopt GLP-1 drugs by 2027.

While the impact of GLP-1 drugs on the stock market has been significant, it is uncertain whether the implications of widespread weight loss have already been priced in for most stocks. Analysts are divided on the long-term effects of these drugs on various industries, including airlines and food service.

In conclusion, Insulet and DexCom stocks show promise amidst the weight-loss drug craze. Analysts believe that the potential growth opportunities for these companies outweigh the impact of GLP-1 drugs on diabetes prevalence. As the market continues to navigate the evolving landscape, investors will closely monitor the performance of these stocks.