When I last wrote about Novo Nordisk (NVO) (OTCPK:NONOF) (NVON:CA) on July 1, I reiterated my Strong Buy rating on the stock. I titled the article, "Novo Nordisk: The Pullback Is Noise - The Buy Case Is
Novo Nordisk: I Was Wrong Twice, But This Selloff Looks Like 2016 All Over Again
Summary
- I'm downgrading Novo Nordisk from Strong Buy to Buy due to recent guidance cuts, competitive pressures, and persistent compounded GLP-1 drug erosion.
- The long-term obesity drug opportunity, Novo's manufacturing scale, and a strong pipeline still support a bullish multi-year thesis.
- Novo is attractively valued after the sell-off, but near-term recovery requires patience; it's a Buy for long-term investors comfortable with volatility.
- This isn't the first time that Novo Nordisk has been through a phase of slowing growth followed by a CEO transition. The company may be able to navigate the headwinds just like last time.
I objectively search for undervalued stocks of any size across a wide variety of industries using quantitative methods that I've thoroughly backtested for success. I believe the numbers are more important than the story (most of the time), as they tend to paint a more realistic picture of the company’s prospects. I have been investing since 2013. Apart from what I’ve learned from experience, my knowledge comes from reading a vast number of stock market books over the years. Some of my favorites include 100 Baggers, Financial Shenanigans, and The Quants.Earlier part of StockBros Research and now writing under this account.
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.