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Novo Nordisk (NVO) dropped 1.9% to $48.25 and trades more than 50% below its 52-week high.
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Novo Nordisk earnings collapsed 26.5% year-over-year despite operating in the obesity treatment market.
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Competitive pressure from Eli Lilly (LLY) has intensified as Zepbound gains market share rapidly.
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Shares of Novo Nordisk A/S (NYSE: NVO) dropped 1.9%today, closing at $48.25, just a whisker above the 52-week low of $45.05. Sometimes we see a divergence in share price and sentiment, but with Novo Nordisk they’re actually well correlated.
Discussion on Reddit has remained uniformly bearish throughout November. Novo Nordisk is trading more than 50% below its 52-week high, a stunning collapse for a company that was once viewed as the premier play on the obesity treatment revolution.
While not the only reason, it’s easy to see a notable downward trend in Google Trends for both of Novo Nordisk’s premier GLP-1 products, Ozempic and Wegovy
Despite strong underlying fundamentals like a 71.5% return on equity and huge 32.9% net income margin, retail traders are persistently skeptical about the Danish drugmaker’s future.
Activity on r/WallStreetBets has been consistently negative. Sentiment scores have ranged from a low of 18, to only as high as 30 this moth. When 50/100 considered perfectly neutral, this is deep in bearish territory. The most active period occurred on November 10, when one poster asked “where’s the n bottom?”
Novo Nordisk down another 2% today, where’s the bottom?
by
u/BearishOnPharma in
wallstreetbets
Retail investors are focusing on fundamental deterioration with Novo Nordisk’s position as a leader in GLP-1 treatments. The concerns are rooted in:
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Earnings collapsed 26.5% year-over-year despite operating in the supposedly booming obesity treatment market
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Revenue growth slowed to just 5.1% YoY, a steep deceleration
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Competitive pressure from Eli Lilly (NYSE: LLY) has intensified, with Lilly’s Zepbound gaining market share rapidly
All of this means the stock now trades at a forward P/E of just 11.99, a far cry from the premium valuations of 1-2 years ago.
Wall Street analysts appear equally uncertain, with two out of eleven analysts rating the stock a sell, unusual for a major pharmaceutical name. The consensus price target of $56.91 represents only 15.8% upside from current levels, hardly inspiring confidence. The company’s official description as “a premier global healthcare company at the forefront of innovation” rings hollow when earnings are contracting at double-digit rates.
