In this article, we shall discuss the 5 best weight loss stocks to buy now. To read our detailed analysis of the obesity epidemic and the weight loss sector, go directly and see 10 Best Weight Loss Stocks to Buy Now.
5. Novo Nordisk (NYSE:NVO)
Hedge Fund Holdings: 32
Based in Bagsvaerd, Denmark, Novo Nordisk (NYSE:NVO) is a multinational pharmaceutical company which produces two of the leading obesity treatments in the market, namely Wegovy and Saxenda. These drugs use hormonal treatment to regulate appetite. In Q2 2022, the company beat EPS estimates of $0.73 by $0.03, posting earnings of $0.76 per share, making it one of the best weight loss stocks in the market right now. Investor interest in Novo Nordisk (NYSE:NVO) also increased in the second quarter of 2022, with 32 hedge funds long the stock, compared to 31 in the preceding quarter. As of Q2 2022, Jim Simons’ Renaissance Technologies is the largest shareholder in the stock, with a total stake of $1.95 billion.
On September 10, Oddo BHF analyst Martial Descoutures upgraded Novo Nordisk (NYSE:NVO) to Outperform from Neutral, conferring a price target of $11.80 on the shares. According to the analyst, the company has generated excellent returns in the past and shows even more promising indicators for continued growth and profitability in the future. Novo Nordisk (NYSE:NVO) has been able to maintain a strong pipeline which is fully geared to support a steady revenue stream and earnings growth through 2026. Post the pandemic and amid the obesity crisis, particularly in the United States and Europe, healthcare and fitness stocks are generally a safe bet and hence, the analyst has claimed that he remains bullish on the stock long-term.
Here is what Baron Funds had to say about Novo Nordisk (NYSE:NVO) in their Q2 2022 investor letter:
“We added to our position in Novo Nordisk A/S, a leading global biopharmaceutical company headquartered in Denmark that specializes in treatments for diabetes, obesity, and other chronic diseases. We wrote about Novo Nordisk in last quarter’s letter. We continue to believe Novo Nordisk’s diabetes and anti-obesity franchise will drive attractive revenue and earnings growth for many years to come. We think both Novo Nordisk and competitor Eli Lilly and Company(which we also own in the Fund) can be successful in these large markets.”
4. Lululemon Athletica (NASDAQ:LULU)
Hedge Fund Holdings: 50
Based in Vancouver, Lululemon Athletica (NASDAQ:LULU) is a Canadian multinational athletic apparel retailer which sells athletic wear particularly for weight loss and cardio exercises like yoga, running, and Pilates. On October 13, Raymond James analyst Rick Patel began coverage of Lululemon Athletica (NASDAQ:LULU) with a Strong Buy rating and a $345 price target. Although the stock is down 25.49% year-to-date, the analyst remains confident about the long-term prospects of the stock. The analyst is bullish on Lululemon Athletica (NASDAQ:LULU) for three primary reasons: The Power of Three Growth Strategy and a strong and established business model; industry leading financials and comp sales; and a massive share buyback program. Furthermore, the company has cultivated a strong and expansive customer base, which is inclined to pay premium cost for the company’s top-of-the-line product line. This will help the company navigate through the current macroeconomic headwinds, making it one of the best weight loss stocks to buy.
In Q2 2022, the company generated a revenue of $1.87 billion, a 29% increase with respect to Q2 2021. Comparable sales have skyrocketed by 25% as store traffic exceeds pre-pandemic levels of footfall. Moreover, hedge fund sentiment around Lululemon Athletica (NASDAQ:LULU) has improved, with 50 hedge funds long the stock in Q2 2022, up from 44 funds in Q1 2022.
3. Amgen Inc. (NASDAQ:AMGN)
Hedge Fund Holdings: 55
Based in Thousand Oaks, California, Amgen Inc. (NASDAQ:AMGN) is an American multinational biopharmaceutical company which focuses primarily on molecular biology and biochemistry. The company’s experimental weight-loss hormone Leptin is delivering stellar results, decreasing appetite and neutralizing the pleasure of eating. Amgen Inc. (NASDAQ:AMGN) posted an EPS of $4.65 in the second quarter of 2022, beating estimates of $4.40 by $0.25. With a price-to-earnings ratio of 21.29 as of October 14, the company generated a total revenue of $6.59 billion in Q2 2022.
On October 11, Morgan Stanley analyst Matthew Harrison upgraded Amgen Inc. (NASDAQ:AMGN) to Overweight from Equal Weight, conferring a price target of $279, up from $257. The analyst is of the view that the upside potential of the company in their mid-term pipeline is greatly underappreciated, and offers a defensive position in the current macroeconomic context, with lucrative near-term options of AMG133 to counter obesity. Harrison contends that AMG133 is likely to achieve similar results in weight loss as Tirzepatide at maximum dosage.
Here is what Aristotle Capital Management had to say about Amgen Inc.(NASDAQ:AMGN) in their Q2 2022 investor letter:
“Amgen Inc. (NASDAQ:AMGN), the pharmaceutical company focused on biotechnology-based therapeutics, was also a top contributor for the quarter. The company reported solid results, with a variety of products, such as bone-strengthening drugs Prolia and EVENITY, contributing to overall revenue growth. Amgen (NASDAQ:AMGN) continued to increase the market share for cholesterol drug Repatha (a catalyst we had originally identified), delivering record quarterly sales as the drug’s usage expands with high-risk patients who have not yet had a cardiovascular event, and as barriers for prescribers, healthcare systems and patients are removed. In addition, we believe the company is poised to gain market share with its biosimilars (akin to generic versions of biologic drugs), also a previously identified catalyst. Biosimilars accounted for over $2 billion in revenue in 2021, and we believe this has the potential to more than double by the end of the decade, accelerated by six additional biosimilars (for a total of 11 products on the market). This includes the upcoming launch in the U.S. of arthritis treatment Amjetiva in January 2023. Meanwhile, the company is advancing its robust pipeline of early- and late-stage assets, with several phase III results due this year. These developments have caused us to remain enthusiastic about Amgen’s (NASDAQ:AMGN) ability to build on its decades of success developing novel treatments using biopharmaceuticals.”
2. Nike Inc. (NYSE:NKE)
Hedge Fund Holdings: 72
Headquartered in Beaverton, Oregon, Nike Inc. (NYSE:NKE) is an American multinational which specializes in the design, development and manufacture of footwear, apparel, equipment, accessories, and services. The company has an exquisite line of running shoes, yoga equipment, sports equipment, and gym equipment which facilitate weight loss and fitness. On October 3, Baird analyst Jonathan Kemp lowered the price target on Nike Inc. (NYSE:NKE) to $100 from $127 and kept an Outperform rating on the shares. The analyst stated that despite his attempts to model current macroeconomic pressures, the company reported a strong consumer demand, greater-than-anticipated inventory, and an impressive earnings outlook. Nike Inc. (NYSE:NKE) has also outlined actions needed to clear good plus incremental currency.
Investor interest in Nike Inc. (NYSE:NKE) increased in the second quarter of 2022, with 72 hedge funds having a collective stake value of $3.34 billion. This was up from Q1 2022, when only 67 hedge funds held stakes worth $3.98 billion in the stock. As of Q2 2022, Ayrshire Capital Management is the largest shareholder in Nike Inc. (NYSE:NKE), owning 24,876 shares worth $2.07 million. In Q2 2022, the company beat EPS estimates of $0.92 by $0.01, posting earnings of $0.93 per share. Furthermore, it was able to generate a total revenue of $12.69 billion in Q2 2022.
Here is what Madison Asset Management had to say about Nike Inc. (NYSE:NKE) in their Q2 2022 investor letter:
“NIKE, Inc. (NYSE:NKE) is the largest seller of athletic footwear and apparel in the world. Started from humble beginnings as Phil Knight’s “crazy idea” in a Stanford entrepreneurship class, Nike marked its 50th anniversary this year. By remaining true to its innovative culture, the brand is as strong as ever and continues to generate attractive growth, soon to surpass $50 billion in annual revenue. In addition to the continuous investments in brand innovation and marketing, over the last few years Nike has invested heavily to lay the foundation for multi-channel commerce. Today, Nike generates approximately 40% of its revenues through its online channel and branded storefronts. Empowered by CEO John Donahoe’s “Nike Consumer Direct Offense,” Nike’s ongoing investments are expected to further drive their overall revenue mix towards the direct-to-consumer channel which we estimate will result in substantial margin improvement over the next three to five years.
While Nike’s business in China, which accounts for approximately 20% of revenue, is experiencing challenges today, our due diligence suggests that consumer preference for the Nike brand outside the U.S. remains incredibly strong. Overall, we expect Nike’s broader ecosystem, often referred to as the Nike Marketplace, to continue to leverage the company’s innovation and premier brand to build direct consumer relationships which deepen Nike’s competitive moat and enhance its financial profile. Turbulence in the Chinese market and concerns over consumer spending in the US and Europe enabled us to initiate a position in Nike at an attractive discount to our appraisal of the company’s long-term value.”
1. Merck & Co. (NYSE:MRK)
Hedge Fund Holdings: 79
Based in Kenilworth, New Jersey, Merck & Co. (NYSE:MRK) is an American pharmaceutical company. The company currently collaborates with multiple weight management enterprises to facilitate weight loss on a large scale. The weight loss business model of Merck & Co. (NYSE:MRK) is based on providing weight management interventions by way to merging a structured diet, behavior coaching, monitoring, and physical activity to achieve clinically meaningful weight loss. As of the second quarter of 2022, Merck & Co. (NYSE:MRK) posted an EPS of $1.87. beating estimates of $1.70 by $0.17. Despite major macroeconomic headwinds, the company continued on its growth trajectory, with net sales increasing by 14.3% year-over-year. Cost inflation has been offset by hikes in product prices, with all business sectors contributing to organic sales growth of 6.6%.
On October 10, Guggenheim analyst Seamus Fernandez upgraded Merck & Co. (NYSE:MRK) to a Buy rating from Neutral, with a $104 price target on the shares. According to the analyst, the company is well-positioned to beat 2023 estimates with margin-driven potential upside to consensus, largely powered by the successful patent of the company’s Januvia drug and key growth in sales of the company’s flagship products, Keytruda and Gardasil. The analyst also noted that the company could see higher earnings if the STELLAR trial is successful this quarter, provided that management has already stated that they have the capacity to produce the drug on a global scale with a competitive cost structure.
Here is what Carillon Tower Advisers had to say about Merck & Co. (NYSE:MRK) in their Q2 2022 investor letter:
“Merck & Co., Inc. (NYSE:MRK) reported a strong first quarter and raised its financial guidance for 2022. The company also continues to benefit from the recent rotation into pharmaceuticals, which historically has been a more defensive industry.”
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