NVO US shares were hit hard overnight, with the ADRs down as much as 15%, after the company delivered weaker-than-expected 2026 sales guidance. While reported results broadly beat expectations, the outlook dominated focus, highlighting intensifying GLP-1 competition, price pressure in the US, and the loss of exclusivity for semaglutide in parts of international markets.
- 2026 guidance was the “big miss”- management flagged sales and operating profit down 5–13% at constant FX, versus consensus declines of ~1–3%.
- Pricing pressure is biting harder than anticipated, from US rebate dynamics, tougher negotiations on injectable GLP-1s, and looming generic competition outside the US.
Novo also changed how it reports guidance, shifting to adjusted (non-IFRS) measures that exclude 340B rebate reversals, which added complexity to these numbers.
FY25 Results:
- Sales DKK309.1bn (+6.4% y/y; in line)
- EBIT DKK127.7bn (slightly below)
- EPS DKK23.03 (just shy)
- Gross margin 81% (down y/y)
- GLP-1 sales DKK152.2bn (slight beat)
- Wegovy DKK79.1bn (beat)
Novo’s core franchise remains powerful, but the competitive landscape has shifted. Rival Eli Lilly & Co. has momentum in US obesity, while pricing is normalising across markets. Management struck a cautiously optimistic tone on oral Wegovy, citing a strong early US launch (>170k patients), and pointed to pipeline catalysts (CagriSema, Mim8, multiple Phase 3 read-outs). On the positive side, capital returns continue, with up to DKK15bn buyback and a DKK11.70 FY25 dividend proposed.
Overall, a disappointing update from NVO in terms of guidance, with 2026 likely to be another tough year, continuing the trend of recent periods. While near term earnings risk is real, the longer-term value will hinge on oral GLP-1 execution, pipeline success, and whether volume growth can outrun pricing headwinds. The stock was already down over 60% from its June 2024 high ~$US150, and we recently bought in at $US49.96. After a strong run out of the gates, the overnight decline sees the price back to our entry level.
Trading on 16x, NVO is cheap on both an absolute basis and relative to its own choppy history. The share price reaction overnight (we think) has fully priced in the low end of company guidance, which we view as the ‘scorched earth’ scenario, provided by the new CEO, Mike Doustdar, who took the reins in 2025. The update seemed like a clearing of the decks, a resetting of expectations; however, we also highlight that there remains a lot of short-term uncertainty given the changing dynamics in their end markets.
