Ahead of Earnings, Is Novo Stock a Buy, a Sell, or Fairly Valued?

Novo Nordisk is expected to release its full-year earnings for 2025 on Feb. 4. Here’s Morningstar’s take on what to look for in Novo Nordisk’s earnings and stock.

Key Morningstar Metrics for Novo Nordisk

• Fair Value Estimate: DKK 423.00
• Morningstar Rating: ★★★
• Economic Moat: Wide
• Morningstar Uncertainty Rating: High

Novo Nordisk Earnings Release Date

• On Feb. 4, Novo Nordisk will announce Q4 2025 results before the opening of the NASDAQ Copenhagen stock exchange.

What to Watch for in Novo Nordisk’s Full Year Earnings

Wegovy pill US launch: Early prescription data for the first weeks of Novo’s launch of the Wegovy pill in the US has looked really good, and perspective on the potential of this launch - and the ability to also launch in any markets outside the US in the near term - will be helpful. Novo will likely have Eli Lilly’s orforglipron coming as a strong oral competitor in April. Investors want to see they are making the most of this lead, particularly in the direct to patient (mostly self-pay or cash pay) channel, closing some of the large gap that widened between them and Lilly in this channel in 2025.

Reputation battle vs. Eli Lilly: Lilly’s Mounjaro and Zepbound are gaining share over Novo’s older semaglutide products Ozempic and Wegovy. Can Novo make the case that its drug isn’t inferior with both the Wegovy pill launch and a high-dose injectable launch that can match Zepbound’s efficacy? I’m bullish on demand for these two products, but the next head-to-head study - the Redefine 4 study comparing pipeline drug cagrisema to Zepbound - may not be able to show that cagrisema is differentiated from Zepbound (we should have data early this year).

2026 Guidance: Our latest forecast assumes a roughly 2% sales decline in 2026, and a steep decline in growth in 2025 that likely pulled the firm to a single-digit growth rate after years of double digit growth. Patent expirations on semaglutide in some markets (outside the US) and lower US prices for Wegovy are headwinds, while an increase in demand at new lower prices and the Wegovy pill launch are tailwinds. Guidance should give us a sense of which will dominate, at least in the near term.

Acquisitions: Novo tried to acquire Metsera and its obesity drug pipeline last year, but felt it wasn’t worth pushing higher, and lost a bidding war to Pfizer. What direction could it go now? Novo is focused squarely on diabetes and obesity patients, and any other conditions these patients may have. Perhaps it can find another firm with technology to help lower manufacturing costs--small molecules or long-acting technology for fewer doses? Preserving margins while lowering price enough to draw significand demand seems like the key in the long run.

Fair Value Estimate for Novo Nordisk

We lowered our fair value estimate to DKK 423 per share from DKK 458 after factoring in the Nov. 6 pricing deal with the Trump administration for obesity drugs starting in 2026, positive data for Lilly’s potential competing amylin agonist eloralintide, and a shorter potential lead time for oral semaglutide versus Lilly’s orforglipron in the US oral obesity drug market in 2026.

We expect Novo to gain $50 billion of a $170 billion global GLP-1 market in diabetes and obesity by 2031, ahead of semaglutide’s 2032 patent expiration, with Lilly as the key competitor. GLP-1 growth drives our overall five-year forecast for 7% top-line and 8% bottom-line growth through 2029.

We now assume US prices for Novo’s semaglutide could fall over 20% in the US in 2026, ahead of our prior assumption for pricing pressure with Medicare negotiation for Ozempic and Rybelsus beginning in 2027, and well ahead of their 2032 patent expirations.

Read more about Novo Nordisk’s fair value estimate.

Novo Nordisk’s Economic Moat Rating

Its strong intangible assets in diabetes and related cardiometabolic diseases like obesity give the firm a wide economic moat that will shield profitability for the long run. A focused research and development strategy allows the firm to repeatedly extend patent protection through innovation. Efficient manufacturing techniques and economies of scale have allowed Novo’s insulin business to provide strong global profitability, qualities that it shares with the only two other global insulin players, Sanofi and Eli Lilly.

We think the firm does face environmental, social, and governance risks, particularly related to potential US drug price-related policy reform (Novo sees roughly 57% of its sales from the US pharmaceutical market) and ongoing potential for product governance issues (including litigation). While we have factored these threats into our analysis, we don’t see them as material to our valuation or moat rating.

Read more about Novo Nordisk’s fair value estimate.

Financial Strength

We assign Novo Nordisk an Exemplary Capital Allocation Rating, with the rating reflecting our belief that Novo Nordisk possesses a sound balance sheet, exceptional investments outlook, and appropriate shareholder distributions.

As of the end of 2024, Novo held roughly DKK 103 billion in borrowings against DKK 26 billion in cash and equivalents. Historically, Novo has held low debt levels, but it has used debt to finance acquisitions like Emisphere(delivery technology) in 2020, Dicerna(RNAi technology) in 2021, and Catalent sites(manufacturing) in 2024. With strong free cash flows, Novo is in a solid position to continue investing in its internal and externally acquired pipeline and distributing cash via dividends and share repurchases.

Read more about Novo Nordisk’s financial strength.

Risk and Uncertainty for Novo Nordisk

Novo Nordisk has a broad global insulin business, but price pressure and growing reliance on the high-growth GLP-1 class add volatility to potential cash flows, and we are maintaining our Morningstar Uncertainty Rating at High.

Our Uncertainty Rating for Novo Nordisk is not materially affected by environmental, social, and governance risks, although we see access to basic services (tied to drug pricing) as the biggest ESG risk the firm needs to manage. Novo Nordisk sees roughly 57% of its sales from the US pharmaceutical market, giving it significant exposure to US policy changes. Novo’s portfolio has high exposure to Medicare; following the passage of the Inflation Reduction Act, we had assumed Medicare negotiation for Ozempic and Rybelsus beginning in 2027, well ahead of their 2032 patent expirations, and we moved this pricing pressure to 2026 with the signing of a new obesity drug pricing agreement with the Trump Administration in November 2025.

Read more about Novo Nordisk’s risk and uncertainty.

NVO Bulls Say

• Novo’s Wegovy is significantly expanding the obesity treatment market, given its strong efficacy, and is poised to remain a key drug in the market until patent expiration in 2032.
• With a solid portfolio of GLP-1 products, including injectable Ozempic and oral Rybelsus, Novo is well positioned to defend its formidable diabetes market share.
• Semaglutide could see significant sales potential in areas including liver disease (MASH) and Alzheimer’s, and Novo could achieve a strong share in these nascent markets.

NVO Bears Say

• Tresiba’s strong profile in the long-acting insulin market hasn’t been enough to defend it from US pricing pressure due to competition from Sanofi and Lilly, and biosimilar insulins have weighed on category pricing since 2017.
• Novo’s Victoza and Ozempic have made GLP-1 a key part of the firm’s diabetes growth, but oral GLP-1 Rybelsus has had slower uptake, and Lilly’s Mounjaro provides strong competition.
• Wegovy had a slow launch due to supply constraints, and Zepbound, Lilly’s obesity drug, has a superior profile.

This article was compiled by Johanna Englundh.