Novo Nordisk (NYSE:NVO) was in the news quite a bit this week, though not for reasons the firm would have preferred. Scheduled to share its Q2 2025 earnings report next week on August 6, the company put a damper on expectations by downgrading its sales forecast for the rest of the year – mostly due to lower growth projections for the company’s flagship Wegovy and Ozempic drugs in the U.S. market.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Whereas the company’s earlier 2025 growth estimates from early May were in the range of 13% to 21%, these have now been lowered to 8% to 14%. Novo Nordisk blamed the decreased guidance on “the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition.”
Needless to say, the market wasn’t exactly thrilled by the announcement of weaker growth – which coincided with the appointment of a new CEO to helm the firm. (Though the company did share the news that the current one would be departing a few months back.)
NVO’s share price has dropped close to 30% during the past few days, continuing a trend of falling value. All told, NVO is down more than 60% over the last twelve months.
Though things look a bit overcast, one top investor known by the pseudonym The Value Portfolio is not deterred.
“Now is a great time for investors to ‘catch that falling knife’ as the company’s core business maintains diversified and strong financials,” states the 5-star investor, who is among the top 2% of TipRanks’ stock pros.
Value Portfolio points to Novo Nordisk’s compelling performance when it comes to both diabetes and obesity care, while also reminding investors that the company is still guiding for growth. Moreover, obesity is a horrible disease impacting large swaths of humanity, and the need for effective treatment – “the company is making substantial progress” – remains robust.
“It’s worth noting that despite all the doom and gloom over the company’s guidance, it’s still a massively growing company reaching millions more patients,” adds Value Portfolio.
Novo Nordisk is also working on bringing an oral semaglutide pill to market, and has submitted reams of data for FDA review. This potential new treatment pathway would go a long way towards attracting even more weight loss customers, the investor explains.
The recent losses could therefore serve as an opportunity for savvy investors to pounce on a long-term winner, notes the investor.
“We feel the market has overreacted and the company is an undervalued investment at this point with growing cash flow,” concludes The Value Portfolio, who rates NVO a Buy. (To watch The Value Portfolio’s track record, click here)
Wall Street generally agrees with this approach. With 2 Buy and 2 Hold ratings, NVO enjoys a Moderate Buy consensus rating. Its 12-month average price target of $78.33 has an upside of more than 50%. (See NVO stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.