The 'miracle weight-loss pill' is trending, but who is happy and who is worried?

According to the Zhongtong Finance APP, in recent weeks, weight loss drugs have made headlines because some companies claim that these drugs may have affected their profits. At first glance, these drugs, known as GLP-1 agonists, may only affect the food and beverage industry, but the reality is that they may impact many consumer industries.

Clothing retailers, gambling companies, and even airlines may be affected by the increasing popularity of weight loss drugs. Some popular "miracle weight loss drugs" include Wegovy and Ozempic from Novo Nordisk (NVO.US), as well as Mounjaro from Eli Lilly (LLY.US).

Bank of America points out that although the use of these new drugs is still in the early stages, it is now important to pay attention to their potential impact. "The impact of these downstream effects on the market is still unclear, but in the long run, they may change consumer behavior, benefiting some industries while posing higher risks to others."

Lorraine Hutchinson, an analyst at Bank of America, suggests that these drugs may benefit the clothing retail industry as they may stimulate people to change their clothing more frequently.

Hutchinson states, "Weight loss drugs may increase demand for products from traditional retailers... but demand for plus-size women's clothing retailers like Torrid (CURV.US) may decline." "We expect sports apparel brands like Lululemon (LULU.US) and Deckers Outdoor (DECK.US) to benefit as GLP-1 drugs support a healthier lifestyle."

She adds, "If individuals using GLP-1 can save money by changing their lifestyle, they can use that money to purchase clothing."

Bank of America states that based on current research, there may be a link between obesity and problem gambling. The bank estimates that such gambling accounts for 10%-30% of all gambling revenue. If more people are prescribed weight loss drugs, it could lead to a decrease in problem gambling, negatively impacting this industry.

Analyst Shaun Kelley from Bank of America states, "This means that the use of GLP-1 could bring headwinds of 0-4% to the commercial gambling industry, with higher risks for slot machines or regional gambling." He adds that he is closely monitoring Boyd Gaming (BYD.US), Caesars Entertainment (CZR.US), MGM Resorts (MGM.US), Penn National Gaming (PENN.US), and Red Rock Resorts (RRR.US).

Although cigarette advertisements have claimed that tobacco can suppress appetite, Bank of America believes that the impact of GLP-1 drugs on this industry will be minimal. It is well known that nicotine suppresses appetite, insulin levels, and promotes metabolism.

Lisa Lewandowski from Bank of America believes that nicotine is primarily used by teenagers and young adult women to control weight. "Due to their income, place of residence, and insurance coverage, this small portion of smokers may not have access to these weight loss drugs."In addition, considering the possibility of long-term use of GLP-1 drugs and concerns about eating disorders in young people, young patients may find doctors hesitant to prescribe these medications."

However, considering the current research on the use of GLP-1 to reduce cravings for addictive substances such as nicotine and alcohol, these weight-loss drugs may have potential implications for the use of tobacco, affecting companies such as Philip Morris (PM.US), Altria (MO.US), and British American Tobacco (BTI.US).

One industry that may benefit from weight-loss drugs is the airline industry. Slimmer passengers mean lighter total weight on the plane, which could reduce fuel consumption. Fuel costs account for about 25% of total expenses for airlines.

Jefferies stated in September that if each passenger on average loses 10 pounds, United Airlines (UAL.US) could save $80 million per year. Analyst Sheila Kahyaoglu said, "All airlines should be aware of this benefit."

However, Ed Bastian, CEO of Delta Air Lines (DAL.US), stated during the third-quarter earnings conference call on October 12 that he believes weight-loss drugs will not have an impact on fuel forecasts.

Nevertheless, the market will still pay attention to comments from top airline management, such as American Airlines (AAL.US) and Southwest Airlines (LUV.US), regarding this issue in the future.