NVO Earnings: Novo Nordisk Stock Rises Despite Cutting Fiscal 2025 Outlook

Shares of Novo Nordisk (NVO) are trending up 7.5% in pre-market trading at the time of writing. The Danish drug maker reported better-than-expected profit for the fiscal first quarter. However, the pharma giant lowered its FY25 sales growth guidance owing to weaker-than-expected sales of its weight loss drug, Wegovy.

Wegovy sales of DKK 17.36 billion in Q1, fell short of Wall Street’s expectation of DKK 18.51 billion, as copycat drugs eroded its market share. For the full year Fiscal 2025, Novo Nordisk now expects sales to grow in the range of 13% to 21% at constant currency exchange rates, much lower than the previously guided range of 16% to 24%. CEO Lars Fruergaard Jørgensen cited increasing competition and lower-than-planned penetration in the compound weight loss drug market in the U.S. for the revised outlook.

Here’s How Novo Nordisk Performed in Q1

Novo Nordisk’s earnings stood at DKK 29.03 billion, beating the consensus of DKK 27.8 billion. Meanwhile, total revenues rose 18% year-over-year to DKK 78.09 billion, falling marginally below analysts’ expectations of DKK 78.18 billion. The sales growth was driven by strong demand for its GLP-1 (Glucagon-like peptide 1) treatments.

Although Wegovy’s sales surged 83% year-over-year, it failed to beat analysts’ estimates. On the other hand, Q1 sales of diabetes drug Ozempic hit DKK 32.72 billion, easily surpassing analysts’ consensus of DKK 31.5 billion.

Weight Loss Drugs Face Heated Competition

The weight-loss drug market faces heated competition from companies including AstraZeneca (AZN), Eli Lilly (LLY), Roche (RHHBY), and AbbVie (ABBV). These companies are actively developing and marketing alternatives to Novo Nordisk’s popular GLP-1 drugs, Ozempic and Wegovy.

The U.S. Food and Drug Administration (FDA) had earlier given approval to compounding pharmaceutical companies in the U.S. to replicate the formulation of Ozempic and Wegovy owing to the drug’s shortage. However, the FDA found that the drug shortage was resolved in February and marked an end date of May 22, when companies are expected to stop selling these copycat drugs.

Unfortunately, NVO’s advanced obesity drug, CagriSema has failed to display favorable results during its drug trials, putting a dent on Novo Nordisk’s ambitions. Despite the odd0073, the company plans to file for regulatory approval of the drug in Q1FY26. In the meantime, Novo Nordisk’s oral GLP-1 treatment for obesity awaits approval from the FDA, and could be a massive success in the U.S.

Is NVO a Good Stock to Buy Now?

On TipRanks, NVO stock has a Hold consensus rating based on three Buys, five Holds, and one Sell rating. Also, the average Novo Nordisk price target of $83.20 implies 25.5% upside potential from current levels. Year-to-date, NVO stock has lost 22.1%.

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