I’ve been looking more into the healthcare sector and it seems like people are particularly bullish on some of these big stocks. Despite having market caps in the hundreds of billions and running over 250% (NVO) and over 350% (LLY) in the past 5 years, these companies are reaching/passing ATHs every week.
Both companies have PEs hovering around 50. I recognize that people are hyping up some magical weight loss drugs, and insulin will always be needed etc. but are these valuations reasonable? They seem like great companies based on some shallow DD I’ve done but I just cant over get over their high PEs.
Any thoughts? Are they going to come crashing down, has most of their growth already happened? Whats the deal with the high PEs?
Leave a Reply