The Swiss banking giant UBS has confirmed its “Buy” recommendation for Novo Nordisk with an unchanged price target of 750 Danish kroner, despite a share price decline of over 20% since the beginning of the year. This decline is mainly due to disappointing study results for the weight loss drug “CagriSema” and concerns about demand for “Wegovy.”
Market Context and Challenges
Weight Loss Market Dynamics: Novo Nordisk is under pressure from the competitor product “Zepbound” by Eli Lilly, particularly regarding subscriptions for Wegovy. Additionally, mixed results for CagriSema have dampened expectations for the company’s pipeline.
Share Price Development: Recently, the stock was trading at around 57.20 euros, reflecting a drop of over 2.5% in a single trading day.
UBS Analysis in Detail
UBS analyst Jo Walton sees long-term potential despite the stock weakness. The price target of 750 DKK implies an upside of about 56% from the current level and is based on the expectation of a recovery due to demand stabilization for Wegovy after recent supply shortages as well as optimized dosing strategies for CagriSema.
Comparison with Other Analysts’ Opinions
| Institution | Rating | Price Target (DKK) | Date |
|---|---|---|---|
| UBS | Buy | 750 | Apr. 2025 |
| Morgan Stanley | Equal Weight | ▼600 (from 700) | March/April |
While Morgan Stanley is more skeptical, UBS sees the current valuation as a buying opportunity, supported by Novo Nordisk’s dominant position in the GLP-1 sector for diabetes and obesity.
For investors, the industry classification is important: Novo Nordisk operates in the healthcare sector with a focus on pharmaceuticals for weight control, a volatile growth market due to regulatory and clinical risks.