Novo Nordisk Stock Forecast - A Pharma Leader (NYSE:NVO) Undervalued as Growth Surges
With 71% global obesity drug share, rising EPS, and a forward P/E of just 14, Novo Nordisk could rebound toward $110 as investors reprice its fundamentals | That's TradingNEWS
NYSE:NVO Stock Rebounds After Steep Sell-Off but Market Still Mispricing Fundamentals
Novo Nordisk (NYSE:NVO) has endured a brutal correction, losing more than 60% of its market capitalization over the past twelve months, slipping from around $640 billion in mid-2024 to $240 billion in August 2025. Despite the sell-off, the company is reporting 20% year-over-year revenue growth, expanding both its top and bottom lines at rates well above the sector median. The market continues to trade NVO as if it were a declining business, valuing it at just 14x forward earnings—nearly half the average S&P 500 multiple—even as EPS is projected to rise 22% in FY2025 to 3.86.
Weight-Loss and Diabetes Franchise Keeps NYSE:NVO at Industry’s Core
NVO remains the dominant force in GLP-1 and anti-obesity treatments. In Q2 2025, Wegovy drove international market share above 71%, while U.S. diabetes care represented 32% of prescriptions. The company disclosed that class growth was running at 30%, a powerful backdrop given the global obesity crisis—42% of Americans are obese and 9% severely obese according to NIH data. Analysts forecast the anti-obesity market to expand from $15 billion in 2024 to as high as $150 billion by 2035. At just under $4 billion in obesity revenues versus Eli Lilly’s $5.7 billion, Novo remains a co-leader in the segment, but its brand strength and FDA approvals in more than 35 countries suggest sustainable dominance.
Valuation Disconnect: Growth Outpacing Price Compression
At current prices, NYSE:NVO trades around 44% cheaper than healthcare peers, even though forward revenue growth of 17% and EBITDA growth of 18.6% are more than double sector averages. Gross margins remain elevated at 83–84%, with net income margins near 36%, and trailing twelve-month profit of $17.5 billion already surpassing FY2024 by 20%. Investors concerned about margins compressing should note that even with guidance cuts—sales growth revised to 8–14% for 2025 from an earlier 13–21%—operating profit is still expected to expand 10–16%. The company’s dividend profile adds to the value case: trailing yield of 3.18%, growing 17% year-over-year, compared to an industry average of just 1%.
Comparative Analysis: Eli Lilly Premium Not Justified Against NYSE:NVO
Eli Lilly (LLY) commands a $629 billion valuation but requires sustained 18% annual growth between 2026–2032 to justify its premium. By contrast, conservative DCF modeling shows NYSE:NVO needs only ~1% growth post-2025 to justify its current $241 billion capitalization. With conservative assumptions, NVO’s fair value is closer to $427 billion, suggesting upside of more than 70%. On valuation multiples, NVO trades at EV/EBITDA of 10.4x versus Lilly’s 24.3x and price-to-cash-flow of 12.5x compared to Lilly’s 57.9x. With gross margins slightly higher than Lilly (84.3% vs 82.6%) and cash from operations nearly double at $19.2 billion versus $10.9 billion, Novo Nordisk is the more profitable and cash-efficient enterprise.
Pipeline, Patents, and R&D Expansion Secure Long-Term Outlook
Beyond Wegovy and Ozempic, NVO is advancing Amycretin for type 2 diabetes and obesity, now entering Phase 3. Semaglutide trials for Alzheimer’s disease, with Phase 3 data expected September 2025, could unlock a market projected at $5.5 billion with double-digit growth. Novo’s patent protection extends through 2031 in the U.S. and Europe, but pressure may arise in Canada and China from 2026. Even with that, management is investing heavily in oral formulations, aiming to counter Eli Lilly’s Orforglipron progress. R&D spending remains aggressive but cooled 11% in Q2, signaling better efficiency as launches scale across 40+ diabetes and 35+ obesity markets globally.
U.S. Pricing Pressure Versus International Expansion
Political scrutiny in the U.S. has forced price adjustments, with new partnerships like GoodRx offering Ozempic and Wegovy at $499 per month for self-pay customers. While this caps near-term margin upside domestically, international growth remains robust. Wegovy volumes abroad surged 125% in H1 2025, offsetting slower U.S. momentum. Management expects rare disease treatments and expanded indications such as MASH to further diversify revenue. Despite contracting promotional leverage in the U.S., global demand continues to lift both sales and brand penetration.
Assessment: NYSE:NVO as a High-Conviction Buy
At a current forward P/E of just 14, Novo Nordisk is trading at its five-year valuation trough while simultaneously reporting double-digit growth across revenue, EPS, and dividends. With a market leading 71% international share in anti-obesity treatments, consistent profitability margins above 30%, and a diversified pipeline expanding into Alzheimer’s and rare diseases, the sell-off appears exaggerated. Compared against Eli Lilly’s premium pricing, NVO represents the more attractive opportunity, with realistic upside potential toward a $110 share price and $500 billion market cap over 12–18 months.
