Positive Outlook for Novo Nordisk: Buy Rating Driven by Legislative Changes and Robust Sales Growth

Analyst Michael Nedelcovych of TD Cowen maintained a Buy rating on Novo Nordisk (NVO – Research Report), retaining the price target of $105.00.

Michael Nedelcovych has given his Buy rating due to a combination of factors that favorably impact Novo Nordisk’s financial outlook. The potential legislative changes to the Inflation Reduction Act (IRA) could significantly benefit Novo Nordisk by delaying price negotiations for small molecules like Ozempic, Rybelsus, and Wegovy until 13 years post-launch. This delay would remove these drugs from the IRA list until the next decade, potentially boosting both top- and bottom-line growth rates from 2024 to 2030.
Furthermore, the updated sales model projects a 16% increase in 2025 sales to DKK 336 billion, which, while at the lower end of guidance, still reflects robust growth. If the IRA’s “pill penalty” is removed, Novo Nordisk could see an increase in its 2030 sales projection by DKK 21 billion, with revenue and EPS compound annual growth rates (CAGR) improving by 1 percentage point each. These factors collectively contribute to a positive outlook, justifying the Buy rating.

In another report released on March 30, BMO Capital also maintained a Buy rating on the stock with a $105.00 price target.