Why Viking Therapeutics Stock Rocked the Market Today

Viking therapeutics (VKTX 11.31%) stormed the stock market on Wednesday. Shares of the innovative biotech surged more than 11% not because of any proprietary news from the company, but when an analyst initiated coverage. That performance was more than enough to top the bell curve S&P 500 index, which rose just over 1% on the day.

32% growth potential, the analyst believes

Well before the market opened, JP Morgan’s Hardik Parikh released coverage on Viking Therapeutics. The analyst is quite bullish on the biotech company’s future, as he has labeled it an overweight (buy, in other words) with a price target of $80 per share. Even after Wednesday’s rally in shares, that target suggests upside of nearly 32% from current levels.

Like many investors and quite a few pundits, Parikh believes the company could be in for a treat if it successfully brings its experimental GLP-1 obesity drug, VK2735, to market. Such treatments are very popular in the US these days due to the country’s relatively overweight population.

One advantage that VK2735 would have over the few obesity drugs currently approved by the Food and Drug Administration (FDA) is that it is administered orally. Wegovy from Novo Nordisk and Eli LillyZepbound are both delivered by injection.

A monster market in the future

In his release note for his Viking Therapeutics coverage, Parikh was bullish on the weight loss drug market. “We continue to believe that the market for GLP-1 will be substantial, with US market sales of approximately $120 billion in 2030, and orals will play an increasingly important role.”