Christopher Johnson: Just a month ago, Novo Nordisk NOVO B was the largest stock in Europe. This week’s sudden plunge in the share price means it has lost ground further to the new leader, German software giant SAP.
The question for investors is whether the shares of the drug manufacturer, which rode the wave of the weight loss-drug mania, are a buy, fairly valued—or a sell and primed for more losses.
From mid-2022 through last summer, Novo stock was on a tear. The Danish company’s stock surged, fueled by huge demand for weight-loss drugs Ozempic and Wegovy.
Along the way, the success of its obesity drugs helped Novo became the biggest stock in Europe. But at the same time, Novo stock pushed into overvalued territory according Morningstar analyst Karen Andersen.
Novo Nordisk Profit Warning Triggers Share Price Slide
But 2025 has been a very different story for Novo Nordisk stock.
Earlier this year Novo stock began to slide and that drop has now turned into a total rout.
Novo Nordisk’s shares fell more than 23% by Tuesday’s market close, extinguishing roughly 60 billion euros from the Danish drugmaker’s valuation.
The maker of blockbuster weight-loss drugs Ozempic and Wegovy warned that it would see a drop in its full-year sales and profit forecasts, as it battles to regain market share from U.S. rival Eli Lilly and take on copycat drugs.
Novo Nordisk in Competition With Eli Lilly For Obesity Drugs
Lilly’s competing drugs, Mounjaro and Zepbound, have been found to be more effective with fewer side effects, challenging Novo’s initial dominance in the weight loss space.
The update also overshadowed the formal appointment of a new chief executive who takes over as CEO in early August, tasked with reversing the company’s recent slide in fortunes.
Are Novo Nordisk Shares a Buy, Sell or Hold?
So now, is Novo Nordisk stock cheap after its big decline? Or is it still expensive?
On the one hand, Morningstar’s Karen Andersen has slashed her fair value estimate for the stock to 458 Danish kroner from 552. In cutting Novo’s valuation, she cited weaker U.S. growth prospects and the firm’s weaker 2025 earnings forecasts.
But with Novo stock trading at 320 kroner, it shares are now in 4-star territory according to Anderson. She says that despite the weak near-term outlook, for long-term investors, Novo stock is undervalued.
