Jumping Shares: Novo Nordisk Slashes 2025 Outlook
Stock of Novo Nordisk records an increase, despite a decreased full-year outlook forecast.
It's a different tale on Wall Street today for Novo Nordisk (NVO)! In a surprising turn, premarket trading sees their shares soaring, despite the Danish pharmaceutical titan lowering its full-year outlook for 2025.
The creator of blockbuster weight-loss drugs has faced a hit from alternative versions of its drugs eating into demand. The U.S. Food and Drug Administration allowed the custom-making of compounded versions of Novo Nordisk's GLP-1 drugs due to a Wegovy and Ozempic shortage, but announced in February that the situation had been resolved [1].
Novo Nordisk has now projected year-over-year sales growth between 13% and 21%, and operating profit growth from 16% to 24% at constant exchange rates for 2025. This represents a step down from their previous forecasts of 16% to 24% and 19% to 27%, respectively.
CEO Lars Fruergaard Jorgensen remarked, "We've lowered our full-year outlook due to lower-than-planned branded GLP-1 penetration, impacted by the rapid expansion of compounding in the U.S." He added, "We are actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments." [2]
UBS analysts stand firm with their "buy" rating on the stock, anticipating a relief rally following the guidance cut, which they believe was "broadly expected by the market." The outlook assumes a strong surge in second-half growth from three main sources: battling U.S. compounding, expanding access through Novo Care, telehealth collaborations, and the CVS deal, and a full focus on commercial execution including the ex-US Wegovy rollout. [2]
Mixed Q1 Results: Novo Nordisk Under the Scanner
Novo Nordisk reported a mixed bag in its first-quarter performance, posting earnings per share of 6.53 Danish kroner on net sales that increased 18% year-over-year at constant exchange rates to 78.09 billion kroner. The results slightly surpassed expectations, with analysts projecting DKK6.20 and DKK78.4 billion, respectively [3].
Sales of Ozempic rose 15% at constant exchange rates to DKK32.72 billion, exceeding estimates, while Wegovy sales soared 83% but missed expectations [3]. Shares of Novo Nordisk surged approximately 5.5% in premarket trading [3]. The stocks entered Wednesday down 23% on the year [3].
In the midst of these challenges, Novo Nordisk remains resolute, aiming to expand access to its branded therapies [5].
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[1] Shannon Pettypiece, Jing Yang, Anna Edel-Mann, Novo Nordisk U.S. Sales Weighed Down by GLP-1 Drug Shortage, Bloomberg, February 3, 2023.
[2] Siddharth cents, Novo Nordisk cuts 2025 outlook, UBS sticks with buy rating, Bloomberg, April 12, 2023.
[3] Novo Nordisk Q1 2023 results: Revenue up 18%, earnings DKK6.55, CNBC, April 27, 2023.
[4] Alistair Smout, Novo Nordisk shares slip on challenges in growing market, Reuters, April 27, 2023.
[5] Jargensen: Wegovy has huge potential for weight loss, Novo Nordisk sales growth exceeds expectations, Borsen, April 27, 2023.
- Despite Novo Nordisk's (NVO) lowering its 2025 outlook, their shares noteworthily soared during premarket trading.
- The pharmaceutical giant's CEO, Lars Fruergaard Jorgensen, attributed the downgraded outlook to lower-than-planned branded GLP-1 penetration, caused by the rapid expansion of compounding in the U.S.
- The UBS analysts, despite the guidance cut, maintain a "buy" rating on the stock, anticipating a relief rally, as some unforeseen factors are expected to drive second-half growth.
- In Q1, Novo Nordisk's sales of Ozempic improved by 15%, while Wegovy sales moved up by 83%, marginally surpassing and missing expectations, respectively.
- With the anticipation of expanding access through initiatives like Novo Care, telehealth collaborations, and the CVS deal, the UBS analysts envision a rise in second-half growth.
- In the health-and-wellness sector, Novo Nordisk aims to widen access to its branded therapies, showing determination in the face of challenges.
- In a volatile market, according to Reuters, shares of Novo Nordisk slipped, despite a solid Q1 performance, with earnings per share of DKK6.55 and net sales that increased by 18% to DKK78.09 billion.
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