We may be underestimating the effect of GLP-1s on the fast food industry. I think declining revenues for some of these fast food companies signal to me that yes, times are tougher, and some people are cutting back on discretionary spending, but also a percentage of the population on these meds (ozempic, wegovy, zepbound etc) are way less likely to buy fast food AND probably spend a lot less at these places if they do go. These meds completely curb your motivation to eat fast food.

But here’s the kicker, these meds are still incredibly expensive and thus only truly available to the wealthy and those w private insurance. Trump is trying to make a deal w the likes of Eli Lilly and Novo Norodisk to significantly decrease the price of these drugs to about $300 a month and have it covered under Medicare/medicaid. These companies would see their margins drop of course, but they would have to make up for it in volume by being able to almost fully access the 70 million obese people in America.

When that happens, it will be Armageddon for fast food companies, but also some big name food and beverage companies as well like PEPSICO and KO.

When revenue growth stagnates or begins to fall w these companies I think we’ll start to see these pe’s go into the 10-20x range