Novo Nordisk stock is in a buy zone above a cup with handle's entry of 137.22, according to IBD MarketSurge. Its relative strength line which compares the stock's performance to the S&P 500, is at a new high. Novo Nordisk is today's selection for IBD 50 Stocks To Watch.
Shares broke out from the late stage base in strong volume on Tuesday. The base is late-stage, which makes the breakout riskier than from earlier bases. Yet, the company's fundamentals are supportive of further stock gains.
Sales growth has been in a wide range the past eight quarters, between 8% and 41%. Earnings grew over the seven most recent quarters from 2% to 69%, with most of the best gains coming in the most recent periods. Sales grew 22% to $9.5 billion during the first quarter, while earnings of 82 cents per share were 28% higher than the prior year.
The medical stock holds an ideal Composite Rating of 99 while its EPS Rating of 97 and Relative Strength Rating of 93 also place the stock among leadership grade. The stock has outperformed the S&P 500 with a 37% gain year to day, while the index has risen about 11%.
Mutual funds own just 2% of the stock, although more funds have been buying it over the past seven quarters. The Allspring Growth Fund (SGRAX) holds shares of Novo Nordisk. The stock is also a holding on IBD Leaderboard and ranks first in the ethical drugs industry group.
Novo Nordisk makes products to treat and manage obesity and diabetes. The company also makes medicines to treat rarer conditions that affect blood clotting and growth hormones.
Its Wegovy obesity drug has also been approved for managing certain risks that affect the heart's functions in patients with obesity or with an existing heart condition. In March, Novo Nordisk agreed to acquire Cardior, a biotech firm that targets RNAs to treat heart disease.
The anti-obesity drugs market is on a fast growth path. According to Allied Market Research, the market size will reach $4.4 billion by 2032 from $1.6 billion in 2022.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
