Novo Nordisk’s (NVO) stock has dropped by 25% in March (on the Copenhagen exchange) to put it on track for its biggest monthly loss since July 2002. Investors are worried that the company is losing its lead in the obesity drug market to U.S. competitor Eli Lilly (LLY). Novo’s weight-loss injection, Wegovy, had helped the company become Europe’s most valuable firm in 2023. But this week, it lost that title to Germany’s SAP (SAP).
Indeed, pressure has been building ever since Eli Lilly launched Zepbound, its weight-loss drug that showed better results than Wegovy in clinical trials. Even though Wegovy’s sales more than doubled in the last quarter of 2024, investors are still losing confidence. Novo’s stock has fallen 23% this year and is now worth half of what it was last summer, while Eli Lilly’s stock is up 6%. In addition, analysts say that Wegovy prescriptions have been flat, despite Novo saying that it increased its supply in the U.S. To make things worse, Zepbound is now leading by 80,000 prescriptions per week.
Adding to the concern is that Novo’s next-gen obesity drug, CagriSema, delivered disappointing trial results. On top of that, new U.S. tariffs could also hurt Novo since it manufactures key ingredients for Wegovy and Ozempic in Denmark. Nevertheless, Novo Chairman Helge Lund noted that despite these worries, the company is sticking to its long-term strategy and will keep communicating clearly with investors.
Is NVO Stock a Good Buy?
Overall, analysts have a Moderate Buy consensus rating on NVO stock based on five Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVO price target of $110.36 per share implies 56.9% upside potential.
