TD Cowen analyst Michael Nedelcovych lowered his model estimates for Danish drugmaker Novo Nordisk (NVO), citing fierce competition in the incretin market, particularly from Eli Lilly (LLY). He predicts sales and earnings could shrink starting in 2026, with NVO stock’s valuation at risk due to the anticipated U.S. patent expiration of semaglutide in 2032.
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Semaglutide is Novo’s blockbuster type 2 diabetes and anti-obesity drug. It acts like the natural GLP-1 (glucagon-like peptide-1) hormone to control blood sugar and aids in weight loss by curbing hunger and boosting fullness. It is marketed as Ozempic, Rybelsus, and Wegovy.
On January 16, NVO stock rallied more than 9% after early data showed strong first-week U.S. demand for Wegovy. Additionally, Britain’s Medicines and Healthcare Products Regulatory Agency (MHRA) approved a higher weekly dose of the Wegovy injection, up to 7.2 milligrams from 2.4 milligrams.
Analyst’s View on NVO Stock
Nedelcovych recently cut his price target from $105 to $70 (Street-high target), implying 12.3% upside potential from current levels. Despite the lowered estimates, he maintained a Buy rating, highlighting five key catalysts that could influence 2026 performance, though he sees a narrow path ahead.
- Wegovy Pill launch
- REDEFINE 4 readout – a Phase III trial pitting CagriSema against Lilly’s Zepbound,
- CagriSema’s first Phase III diabetes data
- Ozempic trends
- Ziltivekimab’s pivotal studies
Why Novo Faces a Narrower Path Forward
Nedelcovych warns that Novo Nordisk’s dominance in diabetes and obesity markets is fading amid intensifying competition. He believes that after years of blockbuster success with Ozempic and Wegovy (both powered by semaglutide), 2026 could mark a pivotal downturn.
In his updated model, Nedelcovych projected 2026 sales at DKK 290 billion, showing a stark 5% drop from his prior estimate of DKK 334 billion and below consensus of DKK 296 billion. Moreover, EPS is projected to fall by 14% to DKK 19.30, significantly lower compared to his previous DKK 25.25 estimate and consensus of DKK 21.26.
Furthermore, his analysis shows that 2026 could mark the start of pressure on Novo’s P/E (price-to-earnings) multiple. This is due to investors’ anticipated expiry of semaglutide patent in the U.S. While Novo Nordisk’s pipeline offers hope, Nedelcovych warns that weak commercial execution in this make-or-break year raises the stakes.
Nedelcovych stated that the incoming CEO has no radical changes, only sharper execution of proven strategies. He also acknowledged that 2026 might be premature to judge this approach, and the above-listed key catalysts would reveal if Novo can rebuild the lost momentum.
Is Novo Nordisk a Good Stock to Buy Now?
Analysts remain divided on Novo Nordisk’s long-term prospects. On TipRanks, NVO stock has a Moderate Buy consensus rating based on four Buys, three Holds, and one Sell rating. The average Novo Nordisk price target of $54.67 implies 12.2% downside potential from current levels. Over the past year, NVO shares have lost 20.8%.
