Novo Nordisk (NVO) AI Stock Analysis

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Novo Nordisk

(NYSE:NVO)

79Outperform

Novo Nordisk's overall stock score reflects its robust financial performance and positive earnings call, highlighting strong revenue growth and strategic advancements in treatment solutions. These strengths are somewhat mitigated by the current bearish technical indicators. The reasonable valuation and dividend yield provide further support, making it a solid choice within the industry despite noted challenges like increased carbon emissions and financial losses.

Positive Factors

Financial Performance

Updated model suggests this could be a 1pp boost to top- and bottom-line CAGR from 2024-30.

Legislation Impact

Pushing small molecule price negotiation to 13 years post-launch would take Ozempic, Rybelsus, and Wegovy off the IRA list.

Negative Factors

Competitive Pressure

Obesity competitor Lilly has made sizable advancements in its commercial and clinical portfolio, causing it to overtake Novo's early lead.

Market Preference

Physicians may have permanently shifted preference to Lilly's tirezepatide due to challenges in accessing Novo Nordisk's semaglutide product.

Sales Guidance

Analysts expect Novo Nordisk to lower its sales guidance, narrowing the range, which is inconsistent with the higher uncertainty.

Novo Nordisk (NVO) vs. S&P 500 (SPY)

Market Cap

$284.58B

Dividend Yield2.03%

Average Volume (3M)7.97M

Price to Earnings (P/E)19.7

Beta (1Y)0.84

Revenue Growth24.91%

EPS Growth21.42%

CountryUS

Employees76,302

SectorHealthcare

Sector Strength64

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.89

Shares Outstanding3,390,128,000

10 Day Avg. Volume9,732,171

30 Day Avg. Volume7,973,406

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)10.10

Price to Cash Flow (P/CF)61.40

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$83.80

Price Target Upside39.88% Upside

Rating ConsensusHold

Number of Analyst Covering8

Novo Nordisk Business Overview & Revenue Model

Company DescriptionNovo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease. The Diabetes and Obesity care segment provides products for diabetes, obesity, cardiovascular, and other emerging therapy areas. The Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company also provides insulin pens, growth hormone pens, and injection needles. In addition, it offers smart solutions for diabetes treatment, such as smart insulin pens and Dose Check, an insulin dose guidance application. The company has a collaboration agreement with UNICEF to tackle childhood obesity; and with Valo Health, Inc. to discover and develop novel drug programmes for cardiometabolic space. Novo Nordisk A/S was founded in 1923 and is headquartered in Bagsvaerd, Denmark.

How the Company Makes MoneyNovo Nordisk makes money primarily through the sale of its pharmaceutical products, which include a wide range of insulin and GLP-1 receptor agonists for diabetes management, as well as treatments for obesity and rare diseases. A significant portion of its revenue comes from diabetes care products, which are distributed globally. The company operates a robust research and development pipeline to continually innovate and expand its product offerings. Novo Nordisk maintains strategic partnerships with healthcare providers and institutions to enhance its market reach and customer engagement. Additionally, the company benefits from its strong global presence, with operations in numerous countries, allowing it to leverage scale and distribution efficiencies.

Novo Nordisk Financial Statement Overview

Summary

Novo Nordisk has demonstrated exceptional financial performance with strong revenue growth and high profitability margins. The income statement shows significant revenue growth and efficient cost management. The balance sheet indicates solid financial stability with a strong capital base, though debt levels require monitoring. Cash flows remain strong despite a slight decline in free cash flow.

Income Statement

Very Positive

Novo Nordisk's income statement reflects robust growth and profitability. The company achieved significant revenue growth with a 25.05% increase from 2023 to 2024, showcasing strong market performance. Gross profit margin remained high at 84.68%, indicating effective cost management. The net profit margin of 34.77% underscores healthy bottom-line profitability. Additionally, EBIT and EBITDA margins are strong at 44.19% and 50.94% respectively, highlighting efficient operations and solid earnings before tax and non-cash expenses.

Balance Sheet

Very Positive

The balance sheet of Novo Nordisk demonstrates financial stability with a good equity ratio of 30.80%, indicating a solid capital base relative to total assets. The debt-to-equity ratio stands at 0.72, showing a moderate level of leverage that is manageable. Return on equity is impressive at 70.37%, reflecting strong earnings generated from shareholders' equity. These metrics indicate a well-capitalized company with effective use of debt and equity, though the increasing total debt warrants monitoring.

Cash Flow

Very Positive

Novo Nordisk's cash flow statement shows a positive trajectory with a free cash flow growth rate of -0.50% from 2023 to 2024, remaining relatively stable. The operating cash flow to net income ratio is 1.20, suggesting robust cash generation from operations relative to net income. The free cash flow to net income ratio is 0.69, indicating a substantial portion of earnings is converted into free cash flow. Overall, the company displays strong cash flow resilience, although capital expenditures have impacted free cash flow slightly.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
290.40B	232.26B	176.95B	140.80B	126.95B
	Gross Profit
245.88B	196.50B	148.51B	117.14B	106.01B
	EBIT
128.34B	102.57B	74.81B	58.64B	54.13B
	EBITDA
137.38B	113.33B	76.41B	64.83B	58.56B
	Net Income Common Stockholders
100.99B	83.68B	55.52B	47.76B	42.14B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
26.31B	30.23B	23.57B	17.48B	12.76B
	Total Assets
465.80B	314.49B	241.26B	194.51B	144.92B
	Total Debt
102.79B	27.01B	25.78B	26.64B	10.36B
	Net Debt
87.13B	12.61B	13.13B	15.93B	-2.40B
	Total Liabilities
322.31B	207.93B	157.77B	123.76B	81.60B
	Stockholders Equity
143.49B	106.56B	83.49B	70.75B	63.33B
Cash Flow		Free Cash Flow
69.66B	70.01B	64.13B	47.62B	29.87B
	Operating Cash Flow
120.97B	108.91B	78.89B	55.00B	51.95B
	Investing Cash Flow
-128.90B	-43.89B	-24.92B	-31.61B	-22.44B
	Financing Cash Flow
8.73B	-63.16B	-51.80B	-25.49B	-32.24B

Novo Nordisk Technical Analysis

Technical Analysis Sentiment

Negative

Last Price59.91

Price Trends

50DMA

75.36

Negative

100DMA

83.74

Negative

200DMA

103.50

Negative

Market Momentum

MACD

-4.49

Positive

RSI

35.33

Neutral

STOCH

17.31

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVO, the sentiment is Negative. The current price of 59.91 is below the 20-day moving average (MA) of 65.15, below the 50-day MA of 75.36, and below the 200-day MA of 103.50, indicating a bearish trend. The MACD of -4.49 indicates Positive momentum. The RSI at 35.33 is Neutral, neither overbought nor oversold. The STOCH value of 17.31 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NVO.

Novo Nordisk Risk Analysis

Novo Nordisk disclosed 17 risk factors in its most recent earnings report. Novo Nordisk reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Novo Nordisk Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVO	79 Outperform	$284.58B	19.68	82.03%	2.03%	24.91%	21.42%
MRK	74 Outperform	$195.90B	11.56	40.81%	4.05%	6.85%	4577.79%
AZN	73 Outperform	$210.01B	29.48	17.60%	2.27%	18.03%	18.11%
SNY	70 Outperform	$125.03B	21.43	7.34%	2.90%	-4.57%	2.96%
LLY	68 Neutral	$694.32B	62.53	84.84%	0.66%	32.00%	102.18%
ABBV	60 Neutral	$307.41B	72.70	61.94%	3.70%	3.71%	-12.14%
Sector *	51 Neutral	$5.20B	3.18	-40.80%	2.96%	17.66%	1.94%

* Healthcare Sector Average

Performance Comparison

NVO

Novo Nordisk

59.91

-66.93

-52.77%

AZN

AstraZeneca

67.87

-1.58

-2.28%

LLY

Eli Lilly & Co

827.54

86.66

11.70%

MRK

Merck & Company

78.97

-44.26

-35.92%

SNY

Sanofi

51.85

5.57

12.04%

ABBV

AbbVie

173.78

10.18

6.22%

Novo Nordisk Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -26.65% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong year for Novo Nordisk with substantial sales and profit growth, expansion in patient reach, and significant advancements in R&D. However, challenges such as increased carbon emissions, supply chain investments, and financial losses were noted.

Highlights

Strong Financial Performance

Novo Nordisk achieved a 26% sales growth and 26% operating profit growth in 2024, driven by the GLP-1 portfolio. Sales in North America Operations grew by 30% and International Operations by 19%.

Significant Increase in Patient Reach

The company now serves more than 45 million patients with diabetes and obesity treatments, an increase of almost 4 million patients compared to last year.

Expansion in Obesity Care Market

Obesity care sales increased by 57%, driven by North America Operations growing 45% and International Operations growing 107%.

R&D Advancements

Several obesity readouts were achieved, including CagriSema, semaglutide 7.2 mg, and amycretin, reinforcing the strategic aspiration of developing superior treatment solutions.

Catalent Acquisition Completed

The acquisition of Catalent sites was completed, supporting ongoing scaling efforts and expanding Novo Nordisk's global fill and finish footprint from 11 to 14 sites.

Lowlights

Increase in Carbon Emissions

Total carbon emissions rose by 23% compared to 2023, driven by increased production volumes and investments in capital expenditure.

Challenges in Supply Chain

Continued investments in current and future growth drivers are expected to negatively impact operating profit growth related to the acquisition of the 3 Catalent manufacturing sites.

Net Financial Losses

Net financial items showed a net loss of DKK 1.1 billion compared to a net gain of DKK 2.1 billion last year, primarily reflecting losses on non-hedged currencies.

Company Guidance

In the Novo Nordisk earnings call for the full year 2024, the company reported a 26% growth in both sales and operating profit. They are now serving over 45 million patients with diabetes and obesity treatments, a significant increase from the previous year. The call highlighted a 23% rise in total carbon emissions due to expanded production and investments in capital expenditure. The company also increased the representation of women in senior leadership positions to 42%. The U.S. and International Operations showed strong sales growth, with North America Operations growing by 30% and International Operations by 19%. The GLP-1 diabetes product segment saw a 22% increase in sales, while obesity care sales surged by 57%, largely driven by the drug Wegovy. Novo Nordisk's Rare Disease sales also grew by 9%. The company outlined its strategic initiatives in the obesity segment, including advancements in its CagriSema trials and the introduction of semaglutide 7.2 milligram and amycretin. The financial outlook for 2025 anticipates continued growth, with sales expected to rise between 16% and 24%. The call also addressed the impact of the Inflation Reduction Act and outlined future plans for its R&D pipeline and capacity expansions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.