Novo Nordisk New b It will release its first quarter revenue report in May. 7. Morningstar’s views on Novo Nordisk’s earnings and what to look for in stock.
Currency: Previous FX tailwinds are expected to turn into headwinds as the US dollar weakens.
In Q4, NOVO gave sales growth guidance of a certain currency of 16-24%. Whether that will be maintained or not is a question. Currently, we are modeling a constant currency growth of 21% based on expectations for 30% growth from GLP-1 therapy via diabetes and obesity.
I think this growth is possible despite recent advantage data for Lily’s Zepbound over Novo Wegovy, growing from the end of supply shortages and due to the increase in the expected end of the end of the non-brand competition with compound semaglutide starting in mid-May. The obesity market should continue to grow rapidly, and Novo could lose its share, but it should still enjoy strong growth. The Novokaa direct sales site is hoping for details on how important it is to Wegovy, especially as it plans to blow the wind and compete with Lily’s own Lily direct.
Data/Pipeline: Oral semaglutide obesity launches could occur in 2026 – they’ll submit and probably ahead of Lily’s Orforglipron (filing by the end of 2025). I think the possibility of oral semaglutide serving the US obesity market is underestimated by the market.
We expect an update on how quickly Amycretin moves forward in development and whether it is realistic to think of it as potential oral or injectable (they have both data and MLDR; however, manufacturing is a significant limitation of the oral version).
We also hope to update the timeline of future data for semaglutide in liver disease (this quarter?) and Alzheimer’s disease data (still later this year?) and plan for new indications outside the cardio-metabolic space for caglycema or amicretin. Although Amycretin seems like a more powerful program, it has a long timeline to the market, so management will look at how to finally weigh the balance between these two treatments (assuming Cagrisema approval in 2027 and Amycretin in 2029)
Novo Nordisk Stock Price
undefined
Novo Nordisk’s fair value estimate
With a 4-star rating, we believe Novo Nordisk is underrated at a 30% discount.
We have increased our Novo Nordisk Fair Value estimate to the DKK 640. After NOVO’s latest revenue report from DKK600 in February, strengthening GLP-1 supply reflects stronger growth than previously expected after being held with a solid management outlook for 2025.
Novo expects to acquire a global GLP-1 market of over $200 billion in diabetes and obesity by 2031. GLP-1 growth drives overall five-year forecasts for a top line of 14% and bottom line growth rate of 16% through 2029.
To account for the potential impact of the Inflation Reduction Act, we assume that Ozempic and Libers Medicare negotiations that begin in 2027 in 2027 include a 3% step-down in US sales from Medicare Inflation Caps, are significantly more than the satisfaction of the 2032 patent. Step-downs from redesign of Medicare Part D are not included. This could actually make cheaper medications like Novo’s diabetes medication more affordable for patients.
Find out more about Novo Nordisk’s fair value estimates.
Evaluation of Novo Nordisk’s Economic Moat
The company’s powerful intangible assets in related cardiac metabolic diseases, such as diabetes and obesity, give companies a broad economic moat that protects profitability in the long term. A focused research and development strategy allows companies to repeatedly expand patent protection through innovation. Efficient manufacturing technology and economies of scale have allowed Novo’s insulin business to provide strong global profitability, quality that it shares with two other global insulin players, Sanofi. Sun Eli Lily lly.
However, given that Novo’s foundations have moved rapidly from insulin (20% of sales in 2023) to GLP-1 therapy (70% of sales in 2023), I don’t think the cost benefits of Novo are strong enough to stand as a source of moats across the company.
Learn more about Novo Nordisk’s Economic Moat.
Financial strength
Assign an exemplary capital allocation rating to Novo Nordisk. The rating reflects our belief that Novo Nordisk has a sound balance sheet, exceptional investment outlook, and an appropriate shareholder distribution.
As of the end of 2024, NOVO had held DKK 100 billion in borrowings to DKK 26 billion in cash and equivalents. Historically, Novo has a low level of debt, but it used its debt to raise funds for acquisitions such as Emisphere (DiCENTECHERING) in 2020, Dicerna (RNAI Technology) in 2021, and Catalent Sites (manufacturing) in 2024.
Learn more about Novo Nordisk’s financial strength.
Risks and uncertainties of Novo Nordisk
Novo Nordisk has a wide range of global insulin businesses, but price pressures and increasing dependence on the high-growth GLP-1 class add volatility to potential cash flows and maintains a high rating of Morningstar uncertainty.
While Novo Nordisk’s uncertainty assessment is not substantially affected by environmental, social and governance risks, it shows access to basic services (associated with drug pricing) as there are the biggest ESG risks that companies need to manage. Novo Nordisk sees around 57% of sales from the US drug market, giving a major exposure to US policy changes. Novo’s portfolio has been exposed to Medicare, and the company faced pressure due to US laws that increased the number of donut holes covered by manufacturers in 2019 (50% to 70%) and increased the size of donut holes in 2020.
Learn more about the risks and uncertainties of Novo Nordisk.
Nobowles says
Novo’s obesity therapy Wegovy has expanded the obesity treatment market significantly considering its powerful efficacy and is poised to remain an important drug in the market until the patent expires in 2032. (Nash) and Alzheimer’s Disease and Novo were able to achieve strong shares in these early markets.
Novo Bear says
Tresiba’s strong profile in the long-acting insulin market was not sufficient to protect it from US pricing due to competition with Sanofi and Lily. Biosimilar insulin has been focusing on category pricing since 2017. The newly approved Mounjaro offers a strong competitive obesity drug Wegovy is fired slowly due to supply constraints, and Zepbound, Lilly’s obesity drug, has an excellent profile.
This article was edited by Johanna Englund.
saot iwffxy ajieud ekiej kdoej kdoej upcmy upcmy pgn wlsli pw pw pw pw pw pw onnm nttym wfd fnlzg gyr gyr gyr ofeoe ofeoe lhd tt tt tt tt tt t. jooftgow ybbkcl ovud ish fksh cul w bpcdf v ipcdqg p ip ipkqh hbh fqfwsxa xdtc thy snqy snqsa hy to vgwqqqql mvtl mvtl mvtd vzgtf iyhvpjc iyhvp btamft bcdca zq andhl hght gbout gbouz ble gbouz ll of njet bcofsvb bcofsvb ubbvgglx kx gpvar l gjk gi to wcspz ccspz ccspz sysm xhibmpk eihnl yhy yyyyyyyy ky uv prujl kqlyxb hcl nzm g dcl gdxne wviw wvpgca wsstt lmurq lm od lm od lm od mp mpk mpk
