Danish pharmaceutical group Novo Nordisk overtook global luxury goods leader LVMH at the close of Friday’s trading session.
Last Friday, Danish pharmaceutical company Novo Nordisk pulled off a masterstroke by surpassing the market capitalization of LVMH, the French luxury goods giant, thus establishing its position as Europe’s largest listed company. According to Factset, Novo Nordisk’s market capitalization reached DKK 2,934 billion, or around €393.7 billion at the close of trading, surpassing LVMH’s €389.5 billion.
Novo Nordisk’s rise to prominence has been spectacular, impressing investors for several months. Its recent quarterly results have been fuelled by exceptional growth in sales of its obesity treatments, recording an increase of 157% in the first half of 2023 compared with the same period last year. This impressive growth also led the company to revise upwards its annual sales forecasts in early August. Currently ranked 17th worldwide in terms of market capitalization, Novo Nordisk is just behind JPMorgan Chase, far behind the giant Apple, which is closing in on $3,000 billion in market capitalization.
New leader
For LVMH, this defeat marks the end of its position as European market capitalization leader, which it had held since February 2021. Last January, LVMH had even passed the symbolic 400 billion euro mark, a historic feat for a European company. However, since the beginning of the year, LVMH shares have struggled to regain momentum, largely due to the Chinese economic recovery which, after the lifting of restrictions linked to the COVID-19 pandemic, has failed to meet economists’ expectations.
The epic duel between Novo Nordisk and LVMH for the crown of Europe’s largest capitalization shows how quickly stock market fortunes can change. LVMH had previously dethroned Nestlé in early 2021 to become Europe’s market capitalization leader.
[arm_restrict_content plan=”1,” type=”show”]
Novo Nordisk’s surge on the stock markets has been fueled in large part by positive clinical data for its drug Wegovy, an obesity treatment that reduces the risk of heart disease by 20%. It’s worth noting that Novo Nordisk’s current market capitalization exceeds even the gross domestic product of its home country, Denmark.
Difficult recovery
On the other hand, LVMH had a difficult month of August, with a fall of almost 8% in its stock market value, mainly due to the disappointing performance of the Chinese economy. The normalization of growth in the second quarter after several years of acceleration also weighed on results. As a result, the world’s number one luxury goods company fell 13% from its all-time peak of 902 euros at the end of April, when LVMH became the first company to surpass 500 billion euros in market capitalization.
Thus, the race for Europe’s largest market capitalization continues to be a captivating spectacle on world markets, with Novo Nordisk now in the lead and LVMH seeking to regain its dominant position. Factors such as sales growth, economic performance and product announcements will continue to play a crucial role in this fierce competition between the pharmaceutical and luxury giants.
[/arm_restrict_content] [arm_restrict_content plan=”1,” type=”hide”] [elementor-template id=”101048″] [/arm_restrict_content]
Read also>PARIS STOCK EXCHANGE SHUNS LVMH DESPITE GOOD HALF-YEAR RESULTS
Featured photo : ©Adobe Stock
