Luxury giant loses crown as EU’s most valuable firm
Danish pharmaceutical giant Novo Nordisk has overtaken French conglomerate LVMH, the world’s biggest luxury retailer and owner of Louis Vuitton and Dior fashion brands, to become the EU’s most valuable company, trading data shows.
The healthcare company’s shares surged 2.14% on Friday, bringing the company’s market capitalization to roughly $424.7 billion.
LVMH, Europe’s biggest listed firm since February 2021, saw shares drop by 0.8% on Friday and 14.2% from their all-time high in April. The company was valued at $420.1 billion as of Friday’s close.
“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,” Marcel Stotzel from Fidelity European Fund and Fidelity European Trust told Reuters, commenting on the development.
The Danish drugmaker’s shares have gained steadily over the past three years, ever since the company, which originally specialized in diabetes products, launched its highly-popular obesity drug, Wegovy. Novo Nordisk’s stock surged to record highs last month, after the company published a report stating that Wegovy cuts the risk of heart attacks and strokes by 20%.
Also in August, Novo Nordisk raised its annual sales forecast, in part due to the growing demand for Ozempic, its blockbuster diabetes medicine which has also been gaining popularity for obesity treatment. Overall, as of September 1, the value of Novo Nordisk’s shares more than tripled since 2020, pushing the company’s market capitalization above Denmark’s entire GDP.
LVMH has seen its share price drop in recent months amid low domestic demand for luxury goods due to spiraling EU inflation and surging interest rates. China’s weakening economy and the crisis in the country’s property sector have also soured sentiment towards LVMH, as the Asian country is one of the largest markets for European luxury brands.
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