
Sharp Decline Following Profit Warning
Shares in Danish pharmaceutical giant Novo Nordisk plummeted by more than 23% on Tuesday after the company issued a profit warning. The revised forecast comes in response to intensifying competition for its high-profile diabetes and weight-loss medications, Ozempic and Wegovy. Despite announcing a new CEO on the same day, the leadership change failed to offset investor disappointment triggered by the downgrade in earnings expectations.
Analysts Divided on the Outlook
While markets reacted sharply, analysts appeared more measured in their responses. DZ Bank, for instance, lowered its fair value estimate for Novo Nordisk from 481 to 370 Danish kroner, following the reduced full-year guidance. Nonetheless, the bank maintained its “Hold” rating. In a note published on Tuesday, analyst Elmar Kraus argued that Novo Nordisk was struggling to defend its market position in a fast-growing sector against its main rival, Eli Lilly, as well as the rise of unauthorised copycat products.
Meanwhile, Richard Vosser of JPMorgan remained more optimistic. He upheld his “Overweight” rating on the stock and did not revise his price target of 650 Danish kroner, despite the profit warning. In his analysis, Vosser noted that the company’s revised targets implied a 9% decrease in consensus estimates for 2025 operating profits, but he did not view this as a reason to adjust his stance.
Further Decline Raises Questions About Entry Point
Novo Nordisk shares continued their downward trend on Wednesday, falling an additional 4% after the dramatic 23% drop the day before — marking the largest single-day loss since records began in 1991. The overall decline from the record high reached in June 2024 has now reached 68%.
Many analysts are becoming increasingly sceptical about the company’s near-term prospects and fear that the decline may not be over. However, some market indicators suggest that the worst may already have passed. Despite the recent turbulence, certain valuation metrics point to a potential buying opportunity, hinting that the stock could recover over the longer term.
Investor Uncertainty Amid Strategic Challenges
The pressure on Novo Nordisk reflects broader challenges facing pharmaceutical companies in the weight-loss and diabetes markets, particularly as competition intensifies and the threat of unlicensed alternatives grows. The company’s ability to regain investor confidence may depend not only on leadership changes but also on its capacity to innovate and defend its market share in a rapidly evolving landscape.