Motley Fool analyst calls Viking 'fantastic buy' for risk-tolerant investors
The GLP-1 stock still has room to run, with trial updates, potential regulatory approval, and sales as possible catalysts, the analyst argues
Viking Therapeutics soared last week after the latest data for its GLP-1 therapy / Photo: Facebook/Nasdaq
Shares of Viking Therapeutics, a mid-cap developer of GLP-1-based obesity treatments, are a “fantastic buy,” argues Motley Fool contributor Adria Cimino in a new post. However, Viking is suitable only for investors comfortable with risk, as its share price depends heavily on clinical trial results. Following one such update, the stock surged nearly 20% between last Tuesday, September 22, and last Friday, September 25.
Details
Risk-tolerant investors should consider buying Viking shares: the stock still has room to run even after gaining nearly 20% last week, Cimino writes. The shares soared 36% last Tuesday to $40.85 per share after the company reported topline data from a study of injectable VK2735, its experimental obesity drug, as maintenance therapy.
Like Eli Lilly’s blockbuster Zepbound, the drug targets both GLP-1 and GIP receptors. The idea behind maintenance therapy is that patients can reduce the frequency of treatment after losing weight without losing the results. Participants who switched to injections every other week maintained up to 97% of their weight loss, Viking said. Cimino called the findings “fantastic.” Cimino cautions that Viking shares can fluctuate sharply in response to clinical trial data.
What other analysts say
Following the release of the clinical data, Truist Securities raised its target price for Viking shares from $83 to $87 per share. That implies upside of nearly 145% from the closing price on Friday.
The trial results are encouraging, but investors should remember that they apply only to injectable VK2735, not the tablet, Motley Fool contributor Lee Samaha wrote in another post. He believes the oral maintenance study data will be crucial for the stock.
Viking shares have 18 “buy” calls from Wall Street analysts versus just two “hold” ratings. The average target price is $95.70 per share, about 170% above the Friday closing price.
