Viking Therapeutics: Oppenheimer's $120 Target Signals Huge Upside

Oppenheimer analyst Jay Olson raised his price target on Viking Therapeutics (VKTX) to $120 from $100, maintaining an outperform rating. With the stock trading around $28.50, this target suggests a potential quadrupling in share price. The upgrade follows positive results from the maintenance trial of Viking's lead drug, VK2735, a GLP-1 and GIP agonist for obesity and metabolic disorders.

The bullish call is not isolated; other analysts have targets ranging from $70 to $102, though Goldman Sachs has a more conservative $38 target, citing the need for stronger data from the oral maintenance trial. The divergence reflects differing views on the importance of the recently completed injectable maintenance trial versus the ongoing oral trial, which had disappointing phase 2 safety data.

Oppenheimer's Olson reportedly increased the probability of success (PoS) for VK2735 from 80% to 90% after the maintenance study results, while also nudging up peak sales estimates. This methodological adjustment is a key driver behind the higher price target.

Wall Street consensus for VK2735's unadjusted sales stands at $1.5 billion in 2030, growing to $6.5 billion in 2035. For context, Eli Lilly's tirzepatide (Mounjaro/Zepbound) is expected to generate about $80 billion in sales by 2030. Viking's phase 2 VENTURE trial showed 14.7% mean weight loss at 13 weeks, suggesting a potentially faster weight loss velocity than tirzepatide, which achieved 20.9% at 72 weeks in its phase 3 trial.

The price target hike is significant because it reflects growing confidence in Viking's ability to capture a slice of the massive obesity drug market. If VK2735 can demonstrate competitive efficacy and tolerability, it could become a major player, justifying a valuation far above current levels. The stock's reaction to analyst upgrades often hinges on the credibility of the analyst and the rationale behind the call.

Oppenheimer's raised PoS to 90% is notably high, but not out of line with the consensus of 76.5%. This suggests that the Street is increasingly convinced that VK2735 will succeed in late-stage trials. Positive data from the maintenance trial, which tested injectable doses for 13 weeks after initial treatment, provides evidence that the drug can maintain weight loss, a critical factor for long-term use.

However, the oral formulation remains a wild card. The phase 2 oral trial had a 20% discontinuation rate due to adverse events, which could limit the drug's potential as a convenient maintenance option. The ongoing maintenance trial's second part, testing oral doses, will be crucial. Results are expected in 2027, leaving ample time for volatility.

For investors, the key takeaway is that Viking Therapeutics is a high-risk, high-reward biotech play. The potential to take market share from Eli Lilly's tirzepatide, which is projected to generate $80 billion in sales by 2030, is enormous. Even a small fraction of that market could translate into billions in revenue for Viking. The stock's current price likely does not fully reflect this potential, hence the bullish targets.