Danish pharmaceutical company Novo Nordisk has surpassed French conglomerate LVMH to become the European Union’s most valuable company, according to trading data. Novo Nordisk’s market capitalization reached approximately $424.7 billion after its shares surged 2.14% on Friday. On the other hand, LVMH, the world’s largest luxury retailer and owner of brands such as Louis Vuitton and Dior, saw its shares drop by 0.8% on Friday and 14.2% from its all-time high in April. LVMH’s valuation stood at $420.1 billion as of the close of trading on Friday.
Marcel Stotzel from Fidelity European Fund and Fidelity European Trust commented on the development, stating, “Novo closing in on LVMH as Europe’s biggest market cap stock is a reflection of Novo’s recent product success while LVMH’s recent trends have been more mixed.”
Novo Nordisk’s shares have been steadily increasing over the past three years since the company launched its popular obesity drug, Wegovy, despite originally specializing in diabetes products. The stock reached record highs last month after the company published a report stating that Wegovy reduces the risk of heart attacks and strokes by 20%.
In addition, in August, Novo Nordisk raised its annual sales forecast, citing the growing demand for Ozempic, its diabetes medicine with increasing popularity for obesity treatment. The value of Novo Nordisk’s shares has more than tripled since 2020, pushing the company’s market capitalization above Denmark’s entire GDP as of September 1.
On the other hand, LVMH has faced challenges in recent months due to low domestic demand for luxury goods resulting from spiraling inflation in the EU and surging interest rates. The weakening economy in China and the crisis in the country’s property sector have also affected sentiment towards LVMH, as China is one of the largest markets for European luxury brands.
Novo Nordisk’s rise to become the EU’s most valuable company is reflective of its successful product launches and steady growth in recent years. The company’s focus on addressing health issues such as obesity and diabetes has resonated with the market, leading to increased investor confidence. In contrast, LVMH’s performance has been more turbulent, influenced by various economic factors, especially in China.
As the global economy continues to evolve, it remains to be seen how both companies will navigate the challenges and capitalize on new opportunities. Nonetheless, Novo Nordisk’s achievement highlights the importance of innovation and meeting societal needs in driving market success.
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