Why Novo Nordisk Stock Dropped Today

On Thursday, Reuters reported anemic U.S. medicine information is contributing to capitalist concerns that Novo Nordisk is nary longer a maturation stock. Taking a speedy cue from the report, Singapore's DBS Bank has flipped 180 degrees, cutting its standing connected Novo Nordisk banal from "buy" each the mode to "sell."

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Let's commencement with the Reuters report. Ever "since launching its wildly fashionable weight-loss cause Wegovy successful 2021," says Reuters, Novo has trained investors to expect the company's net reports to diagnostic regular updates of caller and improved income guidance. In February, however, the institution said income volition turn lone 16% to 24% this year, which is "a overmuch slower gait than successful the past fewer years."

Reuters cites IQVIA information to amusement that "U.S. Wegovy prescriptions person plateaued since mid-February," versus Eli Lilly's (NYSE: LLY) competing Zepbound GLP-1 drug, which is taking marketplace stock from Novo. Adding to Novo's misery, objective proceedings information connected the company's caller CagriSema drug, which was expected to beryllium adjacent amended than Wegovy and Ozempic, isn't measuring up.

Result: Investors are present bracing for atrocious quality erstwhile Novo Nordisk reports its Q1 net connected May 7.

Digesting each this news, DBS Bank concludes Novo Nordisk's tally is done and that it's clip to merchantability the stock. This morning, The Fly reports that DBS has downgraded Novo banal each the mode from bargain to merchantability and acceptable a terms people of 330 Danish krone -- astir $50.28 -- connected the stock. That's astir 18% beneath wherever Novo banal trades today.

I disagree.

Priced astatine 18.2 times net today, Novo looks to maine much than reasonably priced for a 16%-to-24% maturation rate. In fact, it mightiness adjacent beryllium cheap. The champion clip to bargain Novo Nordisk mightiness really beryllium close now, erstwhile everybody other seems to hatred it.

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