Diabetes-device makers’ stocks are breaking out of ‘GLP-1 jail’ ahead of schedule, analysts say, after months of stock-market punishment based on fears that the popular obesity drugs would clobber the market for their products.
DexCom and Insulet shares were among the S&P 500’s worst healthcare performers in the third quarter, as investors worried that widespread use of GLP-1 drugs like Novo Nordisk’s NVO, -2.29% Ozempic and Wegovy would shrink the market for diabetes devices such as insulin pumps and continuous glucose monitors.
Based on the DexCom results, the “GLP-1 recovery could come ahead of schedule,” Leerink Partners analysts wrote in a report Friday, adding that the company’s earnings “set a very positive tone for pure-play diabetes stocks” in the quarter. The analysts boosted their price target for DexCom shares to $125, from $110 previously.