Key Morningstar Metrics for Novo Nordisk
- Fair Value Estimate: DKK 372
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: Wide
- Morningstar Uncertainty Rating: High
What We Thought of Novo Nordisk’s Earnings
Novo Nordisk NOVO B reported 6% sales growth and 2% diluted EPS growth in 2025, and management guided to a 5%-13% decline in adjusted sales and operating profits (at constant currencies), after excluding a USD 4.2 billion sales rebate provision reversal (expected in the first quarter).
Why it matters: Novo shares declined 15% on Feb. 3 with management’s announcement and a further 6% in trading on Feb. 4 following the firm’s earnings call, a stark contrast to the bullish 2026 view from Lilly’s leadership team on Feb 4.
- Novo has been losing market share in the GLP-1 market to Eli Lilly since mid-2024, and with some international semaglutide patent expirations this year, as well as significant US pricing concessions, Novo faces a rare event for the firm: a declining top line.
- Market share losses increase the urgency for strong execution in the near term (US launches of the Wegovy pill and high-dose Wegovy injections) and mid-term (potential CagriSema launch in 2027 and several pipeline programs advancing in earlier development).
The bottom line: We’re lowering our fair value estimate for wide-moat Novo Nordisk to DKK 372/USD 59 from DKK 423/USD 66. We’ve taken a more bearish view on Novo’s ability to gain volume with injectable Wegovy at lower US prices and to compete with Lilly’s orforglipron internationally starting in 2027.
- Despite these changes, shares are still trading at a discount to our fair value estimate, and we think the market is underestimating Novo’s ability to remain competitive in the GLP-1 market in the long run.
- With potential launches lined up in 2027 (CagriSema) and 2029 (amycretin and cagrilintide) as well as market growth after a US price reset with wide potential 2027 access in Medicare and Medicaid, we think Novo will return to growth (after adjusting for the sales rebate provision) in 2027.
