Expanding Novo Nordisk continues to boost optimism about stock recovery
In the recent market landscape, Novo Nordisk (NVO) has experienced a significant share price drop, with the stock hovering around $50.95 in mid-August 2025 - a stark contrast to its highs above $160 earlier in the year. This decline, however, has not deterred analysts, who view this as a potential buying opportunity due to the divergence from prior high valuations and the fundamentals supporting recovery.
The Danish pharmaceutical company reported a robust 18% sales growth in the first half of 2025, at constant exchange rates, and a 16% increase in kroner (17% at CER). This growth was driven by strong performances in both Diabetes and Obesity care, with sales increasing to DKK 145.4bn (€19.49bn), and Obesity treatments seeing a 56% surge in sales to DKK 38.8 billion (€5.2bn).
Novo Nordisk's key product, Wegovy, is expanding the obesity treatment market, and the company is expected to maintain dominance until patent expiration in 2032. However, challenges persist, such as pricing pressures on insulin products like Tresiba in the US market due to competition, which partly contributed to recent declines.
Long-term forecasts remain bullish, with monthly price forecasts from LongForecast anticipating a steady climb from around $177 at the start of August 2025 to about $210 by November 2025, implying 10%+ upside in the months ahead.
Valuation metrics indicate a current 28% discount to fair value, suggesting a valuation gap amid market volatility that may present an opportunity for investors focused on longer-term fundamentals. Goldman Sachs' note suggests a more favorable risk-reward balance following the sharp share price drop, with a Buy rating and a DKK 400 (€53.62) target price implying about 29% upside from current levels.
Despite the challenges, James Quigley, Goldman Sachs analyst, remains broadly optimistic about Novo Nordisk's long-term potential growth, particularly in the obesity market. However, concerns have been raised about the discontinuation of several pipeline assets, which could affect long-term research and development momentum.
Maziar Mike Doustdar is set to take over as CEO of Novo Nordisk this week, following the ousting of Lars Fruergaard Jørgensen. Goldman Sachs will continue tracking key data points and developments at Novo Nordisk closely.
In summary, despite the sharp share price drop in 2025, analyst consensus and price forecasts favour a rebound by late 2025. This rebound is expected to be driven by Novo Nordisk’s market leadership in diabetes and obesity treatments and a solid product pipeline, with the current low price considered a potential entry point by market watchers.
- The recent share price drop of Novo Nordisk, despite affecting investor sentiment, has prompted some analysts to view it as a potential buying opportunity, given the company's strong performance in health-and-wellness sectors such as diabetes and obesity care, and the bullish long-term forecasts for the obesity market.
- The decline in Novo Nordisk's share price is partly attributed to pricing pressures on insulin products like Tresiba in the US market due to competition, but its key product, Wegovy, is expanding the obesity treatment market, and the company is expected to maintain dominance until patent expiration in 2032.
- In the realm of finance and business, valuation metrics indicate a current 28% discount to fair value for Novo Nordisk, suggesting a potential entry point for investors focused on longer-term fundamentals, as per Goldman Sachs' more favorable risk-reward balance following the share price drop.
