Novo Nordisk's Sell-Off Has Gone Too Far

Summary

  • Novo Nordisk's recent sell-off is overdone; current fears around pricing and CagriSema are temporary, creating a compelling buying opportunity.
  • The company’s fundamentals remain strong, with robust sales growth in Ozempic and Wegovy, and a promising pipeline including oral semaglutide and CagriSema.
  • Regulatory and commercial initiatives should drive patients back to branded GLP-1s, supporting a rebound in sales and earnings through 2025-2026.
  • At a forward PEG ratio below 1x, the stock is trading at a deep valuation discount, failing to reflect its premier status and growth prospects.
  • I rate NVO a "Strong Buy" with the potential to rebound to its previous highs as fears subside and its true value is recognized.
  • I do much more than just articles at Beyond the Wall Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
Novo Nordisk sign on building, Danish pharmaceutical healthcare giant, production innovative drugs, obesity treatment Ozempic, pharmaceutical company innovation, Mainz, Germany June 15, 2024

Victor Golmer

My Investment Thesis

Novo Nordisk A/S (NVO) is $310-billion market cap pharmaceutical, one of the biggest in Europe, operating in 2 business segments: Diabetes and Obesity Care, and Rare Disease, with a consolidated turnover of about $44 billion on a TTM basis.

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This article was written by

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Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NVO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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