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Novo Nordisk (NVO)
NYSE:NVO
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Novo Nordisk
(NYSE:NVO)
Rating:80Outperform
Price Target:
$79.00
â–²(14.61%Upside)
Positive Factors
Market Expansion
Expansion into the DTC space will continue to help Novo combat the sale of compounded agents following the removal of semaglutide from the FDA shortage list.
Pipeline Innovation
Novo Nordisk is committed to driving the next wave of pipeline innovation.
Product Development
Novo Nordisk is pushing ahead with high-dose oral semaglutide for the treatment of obesity as an option for patients who may not want to use injectables.
Negative Factors
Competitive Pressures
Lilly's Mounjaro & Zepbound are expected to continue to take incremental U.S. share from Ozempic and Wegovy.
Leadership Challenges
Announced departure of Novo CEO highlights ongoing competitive pressures that have challenged shares of late.
Market Competitiveness
Novo Nordisk shares are expected to remain less competitive versus other peers in the cardiometabolic market.
Novo Nordisk (NVO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$305.28B
Dividend Yield3.19%
Average Volume (3M)8.38M
Price to Earnings (P/E)20.4
Beta (1Y)0.82
Revenue Growth22.74%
EPS Growth16.36%
CountryUS
Employees77,406
SectorHealthcare
Sector Strength37
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)0.99
Shares Outstanding3,390,128,000
10 Day Avg. Volume6,190,669
30 Day Avg. Volume8,384,600
Financial Highlights & Ratios
PEG Ratio5.49
Price to Book (P/B)15.35
Price to Sales (P/S)0.00
P/FCF Ratio28.63
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$79.25Price Target Upside14.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
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 generates revenue primarily through the sale of its pharmaceutical products. The company's largest revenue stream comes from its diabetes care segment, where it sells a range of insulin products and GLP-1 receptor agonists. These products are critical for the management of diabetes, a condition that affects millions globally. Additionally, Novo Nordisk's revenue is bolstered by its obesity care products, which address the growing global challenge of obesity. The company's hemophilia and growth hormone therapies further contribute to its income. Significant partnerships with healthcare providers and governments, as well as extensive research and development investments, play crucial roles in Novo Nordisk's ability to innovate and maintain its market position. Strategic collaborations with other pharmaceutical companies and research institutions also enhance its product offerings and market reach.
Novo Nordisk Key Performance Indicators (KPIs)
Any
Revenue by Segment
Details revenue from various business segments, providing insight into Novo Nordisk's diverse income streams and strategic focus areas.
Details revenue from various business segments, providing insight into Novo Nordisk's diverse income streams and strategic focus areas.
Data provided by:
Main Street Data
Main Street DataNovo Nordisk Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 3.98%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong sales and profit growth, increased patient reach, and significant regulatory milestones. However, challenges with compounded GLP-1 drugs in the U.S., increased carbon emissions, and a reduced full-year outlook due to lower-than-planned penetration of branded GLP-1 treatments were notable lowlights.Q1-2025 Updates
Positive Updates
Strong Sales and Operating Profit Growth
Novo Nordisk reported an 18% sales growth and a 20% operating profit growth for the first 3 months of 2025.
Increased Patient Reach
Serving nearly 46 million patients with diabetes and obesity treatments, an increase of almost 4 million compared to the first 3 months of 2024.
Wegovy Prescription Growth
Wegovy sales increased by 39% in U.S. operations in the first 3 months of 2025, driven by increased volumes.
Regulatory Milestones
The FDA accepted the application for Wegovy 2.4 mg for metabolic dysfunctional associated steatohepatitis with priority review, and the new drug application for oral Semaglutide 25 mg was submitted.
International Growth
Sales in International Operations grew by 19%, driven by GLP-1 products with Obesity care sales growing by 137%.
Negative Updates
Challenges with Compounded GLP-1
Significant impact on Wegovy market share due to the compounded GLP-1 market in the U.S., with a need to transition patients to branded treatments.
Carbon Emissions Increase
Total carbon emissions rose by 37% compared to the first 3 months of 2024, mainly due to acquisition of new production sites and expansion activities.
Reduced Full-Year Outlook
Reduced full-year outlook due to lower-than-planned branded GLP-1 penetration impacted by the rapid expansion of compounding in the U.S.
Supply Constraints Impact
GLP-1 diabetes sales growth negatively impacted by periodic supply constraints in International Operations.
Company Guidance
During the Q1 2025 earnings call, Novo Nordisk highlighted several key metrics and strategic updates. The company reported an 18% increase in sales and a 20% growth in operating profit for the first three months of 2025. Novo Nordisk now serves nearly 46 million patients with its diabetes and obesity treatments, marking an increase of almost 4 million from the same period in 2024. However, total carbon emissions rose by 37%, primarily due to the acquisition of new production sites and expanded manufacturing capabilities. In terms of diversity, women now hold 42% of senior leadership positions, up from 41% the previous year. The company completed its pivotal REDEFINE 2 trial for CagriSema and is on track to submit for approval in the first quarter of 2026. Despite reducing the full-year outlook due to slower-than-anticipated GLP-1 uptake in the U.S., Novo Nordisk remains committed to expanding access through partnerships and initiatives with pharmacies and telehealth services. Sales in the U.S. grew by 17% while international operations saw a 19% increase, with obesity care sales growing 65% overall. The company is also closely monitoring potential U.S. tariffs but noted that current ones do not materially affect their 2025 financial outlook.Novo Nordisk Financial Statement Overview
Summary
Novo Nordisk exhibits strong financial health with high profitability margins and robust cash flow generation. The company shows consistent revenue and profit growth, underpinned by efficient operations and strategic cash management. The balance sheet is solid, though there is room for improvement in the equity base.Income Statement
Novo Nordisk has demonstrated strong income statement performance with consistent revenue growth, evidenced by a TTM revenue increase of 4.39% compared to the previous annual period. Gross profit margin stands at a robust 84.34%, while the net profit margin is impressive at 34.51%. EBIT margin is 44.52% and EBITDA margin is 50.82%, indicating highly efficient operations and profitability.92
Very Positive
Balance Sheet
The balance sheet of Novo Nordisk shows a solid financial position with a debt-to-equity ratio of 0.86, reflecting manageable leverage. The return on equity (ROE) is strong at 75.53%, highlighting effective use of shareholders' funds. With an equity ratio of 28.32%, the company maintains a balanced capital structure, though there is room to improve equity financing.88
Very Positive
Cash Flow
Novo Nordisk's cash flow performance is robust, with a TTM free cash flow growth rate of 7.29%. The operating cash flow to net income ratio is 1.25, suggesting strong cash generation relative to profits. Free cash flow to net income ratio is 0.71, indicating effective conversion of earnings to free cash flow for reinvestment or distribution.89
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 303.14B | 290.40B | 232.26B | 176.95B | 140.80B | 126.95B |
| Gross Profit | 255.65B | 245.88B | 196.50B | 148.51B | 117.14B | 106.01B |
| EBITDA | 154.08B | 137.38B | 113.33B | 76.41B | 64.83B | 58.56B |
| Net Income | 104.61B | 100.99B | 83.68B | 55.52B | 47.76B | 42.14B |
Balance Sheet | ||||||
| Total Assets | 489.16B | 465.80B | 314.49B | 241.26B | 194.51B | 144.92B |
| Cash, Cash Equivalents and Short-Term Investments | 41.55B | 26.31B | 30.23B | 23.57B | 17.48B | 12.76B |
| Total Debt | 118.72B | 102.79B | 27.01B | 25.78B | 26.64B | 10.36B |
| Total Liabilities | 350.62B | 322.31B | 207.93B | 157.77B | 123.76B | 81.60B |
| Stockholders Equity | 138.54B | 143.49B | 106.56B | 83.49B | 70.75B | 63.33B |
Cash Flow | ||||||
| Free Cash Flow | 74.74B | 69.66B | 70.01B | 64.13B | 47.62B | 29.87B |
| Operating Cash Flow | 131.25B | 120.97B | 108.91B | 78.89B | 55.00B | 51.95B |
| Investing Cash Flow | -139.52B | -128.90B | -43.89B | -24.92B | -31.61B | -22.44B |
| Financing Cash Flow | 40.57B | 8.73B | -63.16B | -51.80B | -25.49B | -32.24B |
Novo Nordisk Technical Analysis
Negative
68.93
Price Trends
70.18
Negative
71.89
Negative
86.24
Negative
Market Momentum
-0.56
Positive
44.54
Neutral
58.60
Neutral
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 68.93 is below the 20-day moving average (MA) of 71.52, below the 50-day MA of 70.18, and below the 200-day MA of 86.24, indicating a bearish trend. The MACD of -0.56 indicates Positive momentum. The RSI at 44.54 is Neutral, neither overbought nor oversold. The STOCH value of 58.60 is Neutral, 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 (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $209.32B | 12.14 | 39.31% | 3.89% | 4.40% | 654.93% | |
80 Outperform | $305.28B | 20.40 | 87.53% | 3.19% | 22.74% | 16.36% | |
78 Outperform | $218.73B | 28.37 | 19.81% | 2.95% | 15.48% | 22.70% | |
74 Outperform | $751.56B | 65.69 | 77.73% | 0.76% | 36.38% | 80.73% | |
71 Outperform | $339.94B | 82.06 | 88.15% | 3.41% | 5.45% | -30.21% | |
67 Neutral | $118.32B | 20.23 | 7.34% | 4.55% | -4.57% | 2.96% | |
52 Neutral | $7.52B | 0.25 | -63.76% | 2.30% | 16.15% | 0.89% |
* Healthcare Sector Average
Performance Comparison
NVO
Novo Nordisk
68.93
-70.49
-50.56%
AZN
AstraZeneca
71.13
-5.45
-7.12%
LLY
Eli Lilly & Co
793.01
-150.99
-15.99%
MRK
Merck & Company
83.36
-40.58
-32.74%
SNY
Sanofi
48.61
<0.01
0.02%
ABBV
AbbVie
192.45
28.82
17.61%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.