Novo Nordisk NOVO B reported its fourth-quarter earnings on Feb. 5. Here is Morningstar’s take on Novo Nordisk’s results and the outlook for the stock.
What We Thought of Novo Nordisk Q4 Earnings
Novo Nordisk grew its top line and operating profit by 25% in 2024, as insulin rebate adjustments drove performance ahead of consensus. Sales of GLP-1 products were in-line with consensus. Guidance for 2025 is 16%-24% constant-currency sales growth plus a 3% currency tailwind.
Why it matters: Novo’s guidance for 2025 reflects several trends that investors are interested in, such as GLP-1 demand, competitive positioning versus Eli Lilly, and headwinds from supply issues or pricing pressure. We think guidance reflects stronger supply and demand in 2025 than our prior expectations.
- We now think the GLP-1 market could grow 42% in 2025, from 54 billion USD to 77 billion USD, with Novo Nordisk seeing 30% GLP-1 growth. We still see a more than 200 billion USD GLP-1 market by 2031.
- Lilly’s Zepbound proved more effective than Wegovy in a recent head-to-head study, and we expect Lilly to gain 5 percentage points of GLP-1 share in 2025, trimming Novo’s lead.
The bottom line: We’re raising our fair value estimate to 640 DKK/89 USD per share/ADR from 600 DKK/86 USD to incorporate a stronger near-term outlook for Novo, and we remain confident in the firm’s innovation supporting its wide moat.
- We’ve raised our 2025 sales growth forecast from 14.5% to 20.9%, within Novo’s guidance and factoring in the currency tailwind.
- With cagrisema’s obesity filing pushed to the first quarter of 2026 due to supply issues, we now expect cagrisema to launch in 2027.
Novo Nordisk Stock Price
Source: Morningstar Direct.
Coming up: While we’re less bullish on upcoming semaglutide’s potential in Alzheimer’s disease (data later this year) as the launch would likely come after Medicare negotiation begins in 2027, we’re focused on additional phase 3 data for cagrisema, particularly head-to-head against Zepbound.
Following amycretin’s very strong midstage data, we’re awaiting more information on its clinical path before adding this to our model.
If shortages persist, compounders are likely to continue to take share of patients in the US, and Novo commented that this competition has been more meaningful than it has expected. With a continuing official shortage of semaglutide in the US, we think Novo will face some (perhaps more limited) supply constraints in 2025, but guidance builds in the ability to grow volumes by more than 30%. Novo is filing oral semaglutide in the US in the first half and it could launch in obesity (25 mg dose) in 2026, but we note that Novo has opted not to file the higher 50 mg dose and has also delayed cagrisema’s filing, both likely due to supply constraints.
Diving deeper into cagrisema’s phase 3 data in the Redefine-1 study, management provided more detail on the efficacy and tolerability profile of the combination treatment which we think could provide rationale for more personalized treatment regimens in obesity. While physicians are already aware of differences in responses between patients, we expect there to be more official guidance on titrating patients based on their initial response with a potential cagrisema approval, in order to maximize both efficacy and tolerability. However, with cagrisema’s launch likely in 2027, we think this gives Lilly time to become more entrenched with Zepbound, and cagrisema is likely to stabilize market share rather than reverse previous declines.
Novo Nordisk Stock vs. Morningstar Fair Value Estimate
Source: Morningstar Direct. Latest price as of 09:50 AM CET.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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