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Novo Nordisk A/S ADR NVO

Morningstar Rating
$96.70 −0.11 (0.11%)
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Novo Nordisk: Raising Our Fair Value Estimates to DKK 540/$80 as We Update Our Long-Term GLP-1 Model

We’re raising our Novo Nordisk fair value estimates to DKK 540/$80 (from DKK 475/$70) after updating our long-term GLP-1 model to include wider use and greater adherence. We have increased our assumptions for overall biopharma GLP-1 sales in 2031 to nearly $170 billion across diabetes ($50 billion), obesity ($85 billion), and overweight ($35 billion). This includes nearly $140 billion in sales from big biopharma firms Novo Nordisk ($65 billion), Eli Lilly ($65 billion), Pfizer ($4 billion), and Amgen ($3 billion), which is higher than our prior estimate of just over $100 billion. Overall, we assume a greater proportion of patients will receive (and stay compliant with) treatment, including overweight (lower BMI) patients, albeit with more competition and at a lower price. We now think more than 25% of obese Americans and 15% of overweight Americans will receive treatment in 10 years, with the vast majority receiving branded GLP-1 therapies. We think prices could fall substantially as volumes increase (in line with payer contracts) and as new entrants launch (beginning in 2026-27), with average net prices falling from roughly $8,000 annually to $3,000 in 10 years. Beginning in 2032, we expect low-cost generic semaglutide to increase treatment rates, likely focusing sales of next-generation products like Novo Nordisk’s cagrisema and Eli Lilly’s retatrutide on patients with higher BMIs who require the most potent therapies. With more than 80% of our 2026 Novo Nordisk sales forecast stemming from GLP-1 therapies, we think the still-evolving efficacy and safety profiles of these next-generation therapies creates high uncertainty around our Novo Nordisk fair value estimate, and we have raised our Uncertainty Rating to High from a prior Medium level. However, we think Novo Nordisk’s impressive innovation in the cardiometabolic space and smart capital allocation provide ample support for its wide moat.

Price vs Fair Value

NVO is trading within a range we consider fairly valued.
Price
$96.81
Fair Value
$82.00
Uncertainty
High
1-Star Price
$462.00
5-Star Price
$71.00
Economic Moat
Dyd
Capital Allocation
Nxgtmnzc

Bulls Say, Bears Say

Bulls

Novo's new obesity therapy 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.

Bears

Tresiba's strong profile in the long-acting insulin market hasn't been enough to defend it from U.S. pricing pressure due to competition from Sanofi and Lilly, and biosimilar insulins have weighed on category pricing since 2017.

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News

Trading Information

Previous Close Price
$96.81
Day Range
$96.2397.02
52-Week Range
$63.16106.15
Bid/Ask
$96.69 / $96.71
Market Cap
$431.32 Bil
Volume/Avg
2.4 Mil / 4.8 Mil

Key Statistics

Price/Earnings (Normalized)
40.44
Price/Sales
14.20
Dividend Yield
1.07%
Dividend Yield (Forward)
1.07%
Total Yield
1.99%

Company Profile

With roughly one third of the global branded diabetes treatment market, Novo Nordisk is the leading provider of diabetes-care products in the world. Based in Denmark, the company manufactures and markets a variety of human and modern insulins, injectable diabetes treatments such as GLP-1 therapy, oral antidiabetic agents, and obesity treatments. Novo also has a biopharmaceutical segment (constituting roughly 10% of revenue) that specializes in protein therapies for hemophilia and other disorders.
Sector
Healthcare
Industry
Biotechnology
Stock Style Box
Large Growth
Total Number of Employees
61,412

Competitors

Valuation

Metric
NVO
RHHBY
LLY
Price/Earnings (Normalized)
40.4413.6673.62
Price/Book Value
32.877.7149.77
Price/Sales
14.203.4916.57
Price/Cash Flow
27.8611.7777.59
Price/Earnings
NVO
RHHBY
LLY

Financial Strength

Metric
NVO
RHHBY
LLY
Quick Ratio
0.630.720.58
Current Ratio
0.821.181.05
Interest Coverage
17.4214.87
Quick Ratio
NVO
RHHBY
LLY

Profitability

Metric
NVO
RHHBY
LLY
Return on Assets (Normalized)
28.64%17.37%10.19%
Return on Equity (Normalized)
88.92%56.49%49.42%
Return on Invested Capital (Normalized)
63.66%27.41%19.29%
Return on Assets
NVO
RHHBY
LLY

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