Equity Research: Novo Nordisk A/S

Novo Nordisk is a Danish global healthcare leader in diabetes care and obesity segments, generating revenues of over DKK 290 billion in 2024. The company’s success is driven by its pioneering development of GLP-1 therapies. Valuation analyses support a buy recommendation, with a fair target price of DKK 553.4 per share. This represents an upside of 29.7% from the current market price of DKK 426.6, paired with a medium risk profile and a discount rate of 6.4%. Key factors underpinning this valuation include Novo Nordisk’s market leading position, protected by patents in the medium term, which ensure strong profitability. Furthermore, its pipeline optionality as well as growing patient population across all segments offer significant growth potential, positioning the company as a leader in expanding markets. However, regulatory pricing dynamics, intensifying competition, pipeline risk and CEO transition introduce risks to future growth which may be the reason for the recent volatility in the stock price. In line with the upside obtained, the observed volatility is seen as being asymmetrically driven by sentiment as it is believed that the market is pricing in market share losses as well as pricing declines beyond values that are seen as reasonable.