Shares of Novo Nordisk (NVO) are down 20% after the European pharmaceutical giant lowered its full-year sales and profit guidance and announced a new CEO.
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The company said it now expects full-year sales growth of 8% to 14%, down from a previous target of 13% to 21%. In terms of profit, Novo Nordisk said that it expects annual growth of 10% to 16% versus the previously estimated target of 16% to 24%.
Management said the outlook was being cut because of weaker growth expectations for its Wegovy weight-loss drug in the U.S. Novo Nordisk said it expects weaker sales of Wegovy and its Ozempic diabetes treatment in America during this year’s second half.
“For Wegovy in the U.S., the sales outlook reflects the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition,” said the company in a news release.
New CEO
The lowered guidance comes as Novo Nordisk struggles to keep pace with its U.S. rival Eli Lilly (LLY), the maker of competing obesity and diabetes drugs Mounjaro and Zepbound. This is the second time in recent months that Novo Nordisk has lowered its guidance. The company previously downgraded its 2025 outlook in May as it reported lower-than-expected first-quarter sales.
At the same time, the Danish pharmaceutical company announced the appointment of Maziar Mike Doustdar, an internal candidate, as its new CEO. The new CEO appointment follows the surprise ousting of Lars Fruergaard Jørgensen in May of this year.
The downwardly revised guidance and new CEO appointment come ahead of Novo Nordisk’s second-quarter financial results that are scheduled to be released on Aug. 6. NVO stock is down 36% this year.
Is NVO Stock a Buy?
The stock of Novo Nordisk has a consensus Moderate Buy rating among four Wall Street analysts. That rating is based on two Buy and two Hold recommendations issued in the last three months. The average NVO price target of $81.33 implies 48.20% upside from current levels.
