Denmark's Economy Runs on Novo. Will the Drugmaker's Troubles Slim It Down?
That, in turn, is generating concern about whether the company's troubles could lead to mass layoffs or become a drag on the broader Danish economy.
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Is Novo Nordisk Stock a Buy, Sell, or Hold Before Q2 Earnings?
Danish pharmaceutical giant Novo Nordisk A/S (NVO) is facing serious headwinds. After enjoying a strong run fueled by demand for its obesity treatments, the obesity drug pioneer is now under pressure from rising competition, particularly from Eli Lilly's (LLY) weight-loss drugs, as well as trial setbacks for its next-generation therapies. In fact, things took a sharp turn on July 29, when the company cut its full-year sales growth guidance for the second time in just three months and named a new CEO. The market response was swift and brutal, with NVO shares plunging over 21% in a single day. Now, with second-quarter earnings just around the corner on Aug. 6, does Novo Nordisk's recent plunge present a golden buying opportunity, or is it a clear signal to keep your distance? More News from Barchart Dear Nvidia Stock Fans, Mark Your Calendars for August 27 Options Traders Expected Palantir Stock's Tamest Earnings Reaction in a Year. Did They Get It Right? Tesla Gains on Elon Musk's New Pay Package. Is TSLA Stock a Buy? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! About Novo Nordisk Stock Best known for its blockbuster weight-loss drugs Ozempic and Wegovy, Novo Nordisk is a global healthcare leader with a long-standing focus on chronic disease. Founded in 1923 and headquartered in Denmark, the company has built a strong foundation in diabetes care while expanding its reach into obesity and other severe health conditions. The company commands a market capitalization of about $217.9 billion. While Novo Nordisk has been a trailblazer in the obesity drug market, its stock has hit a rough patch. Softer demand for its blockbuster drugs, combined with intensifying competition in the weight-loss space, has taken a toll on investor sentiment. The stock has tumbled a staggering 66% from its 52-week high of $139.74 reached in August 2024, and it's currently down 44.7% year-to-date (YTD). In stark contrast, the broader S&P 500 Index ($SPX) has managed to notch a gain of approximately 7.1% over the same period, while its rival Eli Lilly has seen only a marginal drop so far this year, highlighting just how far Novo has fallen out of favor with the market. Given its underwhelming price action, Novo Nordisk stock is starting to look like a value play. Currently trading at just 12.5 times forward earnings, it's priced well below the sector median of 16.87x, and dramatically lower than its own five-year average of 30.92x. Novo Nordisk's Q1 Earnings Snapshot In early May, Novo Nordisk posted a solid first-quarter earnings report for fiscal 2025, but the shine was dulled by a cautious outlook. Total revenue climbed 19% year-over-year (YOY) to 78.1 billion Danish kroner, powered by a massive 85% surge in Wegovy sales, which hit 17.4 billion Danish kroner. Ozempic also continued to perform, with sales rising 18% to 32.7 billion Danish kroner. Profits also impressed, with net profit climbing 14% to 29 billion Danish kroner, while operating profit increased 22% to 38.8 billion Danish kroner. But despite these promising numbers, Novo trimmed its full-year sales growth and operating profit growth guidance, citing 'lower-than-planned penetration of branded GLP-1 treatments in the US.' The company pointed to the growing presence of U.S. compounding pharmacies, which have been legally producing copycat versions of Wegovy and Ozempic under an FDA-approved exemption for addressing drug shortages. That growing parallel market has begun to chip away at Novo's momentum. On a more promising note, the company completed its REDEFINE 2 trial during the quarter, with its next-generation drug CagriSema delivering an impressive 15.7% weight loss in patients with obesity or overweight conditions and type 2 diabetes. Novo plans to file for its first regulatory approval in early 2026, potentially marking the next significant chapter in its obesity pipeline. Novo Nordisk Slashes Guidance Again and Names New CEO On July 29, Novo Nordisk held a conference call that left investors rattled, as it unveiled major leadership changes and another sharp downgrade to its 2025 financial outlook. The company slashed its full-year sales growth guidance to 8%-14%, down from the previously expected 13%-21%. Operating profit growth was also revised lower, now projected at 10%-16% compared to May's forecast of 16%-24%. The revised outlook sent a strong signal that Novo is bracing for a more challenging year ahead. A big part of the pressure comes from its obesity blockbuster, Wegovy. In its update, Novo pointed to several headwinds weighing on U.S. sales, including the continued rise of compounded GLP-1 knockoffs, slower-than-expected market expansion, and increasing competition. These challenges have clouded the outlook for one of Novo's key growth drivers, sparking concerns about whether the company can maintain its dominance in the rapidly growing weight-loss market. Adding to the uncertainty, Novo also announced a leadership shake-up. Maziar Mike Doustdar, the current EVP of international operations, will take over as CEO on Aug. 7, succeeding Lars Fruergaard Jørgensen, whose surprise resignation was announced in May. The transition comes at a pivotal moment, with the company under pressure to protect market share and reignite growth amid shifting dynamics in the obesity drug landscape. What Do Analysts Think About Novo Nordisk Stock? Despite all the swirling uncertainty, there's still a hint of optimism in the air. With Novo Nordisk set to unveil its Q2 earnings on Aug. 6 and a new CEO stepping in shortly after, Wall Street hasn't lost faith, with analysts leaning cautiously bullish, giving the stock a consensus rating of 'Moderate Buy' overall. Of the 19 analysts offering recommendations, seven advise a 'Strong Buy,' nine suggest a 'Hold,' one advocates a 'Moderate Sell,' and the remaining two maintain a 'Strong Sell.' NVO's average analyst price target of $71.75 suggests 47% potential upside from current levels. However, the Street-high target of $112 implies that shares can rally as much as 129.5% from current price levels. On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
an hour ago
- Yahoo
Trump, Apple CEO announce $100B US manufacturing investment
President Trump and Apple (AAPL) CEO Tim Cook announced Apple's additional $100 billion commitment to manufacturing in the US. Watch the video above to hear Trump's and Cook's remarks from the White House on Wednesday. To watch more expert insights and analysis on the latest market action, check out more Yahoo Finance. This is a significant step toward the ultimate goal of ensuring that iPhones sold in the United States of America also are made in America, with the massive infusion of capital. It's announcing today, Apple will also build a 250,000 square foot server manufacturing facility in Houston and invest billions of dollars to construct data centers across the country, from North Carolina to Iowa to Oregon. That's big stuff. Apple will also open a state-of-the-art manufacturing economy. It's going to be a manufacturing academy in Detroit, and that's a great place to do it, you know. Big things are happening in Michigan and Detroit. They're coming in because of what we've done with the, uh, I call it the great big beautiful bill. I added one word, great. But we have, uh, the probably the biggest, most comprehensive piece of legislation ever passed. It's going to mean, uh, unbelievable numbers of jobs, and no jobs on, think of this, uh, whether it's tips or overtime or Social Security, no tax. So no tax on tips, no tax on Social Security, no tax on overtime, and there's just a small bit of it, uh, for Apple and others businesses, we're talking about the deductions and all of the things. And actually for people that go out and buy a car, first time it's ever been done. We talk about deductions for companies, but they're going to be able to deduct interest when they borrow money to buy a car, if it's made in America. Has to be made in America. So it is amazing. One of the reasons I think I can say that Apple's coming here is the legislation we just passed with this kind of investment. Apple will also open other facilities, rare earth magnets from Texas, and build, oh, I love that you're doing this. I love that. I love that. And build a brand new rare earth recycling line in Mountain Pass, California. I know that area. That's where they have a lot of truly rare earth. That's fantastic. I love that. And Apple will help develop and manufacture semiconductors and semiconductor equipment in Texas, Utah, Arizona, and New York. For years, Americans have watched as many of our leading tech giants built their factories overseas and exported American jobs abroad. I'm glad to be here with you today, and I'm very proud to say that today we're committing an additional 100 billion to the United States, bringing our total US investment to 600 billion over the next four years. As a part of this, we're launching Apple's American Manufacturing Program. It will spur even more production right here in America for critical components used in Apple products all around the world. And we're thrilled to announce that we've already signed new agreements with 10 companies across America to do just that. Related Videos Trump Says Apple Is 'Coming Home' With New Investment Trump Says He Will Impose 100% Tariff on Semiconductors Trump, Apple to Announce Fresh $100 Billion US Investment Apple $100B commitment, McDonald's weakness, Super Micro sinks Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Why Novo Nordisk Stock Slipped Today
Key Points It was a double miss for the Wegovy maker in its second quarter. It's been hammered not only by competing licensed drugs, but it also has to contend with copycats. 10 stocks we like better than Novo Nordisk › Novo Nordisk (NYSE: NVO) stock imitated the company's leading product on Wednesday by slimming down in price. The Danish pharmaceutical's shares lost nearly 4% of their value following its latest earnings release, comparing unfavorably to the modest (0.7%) gain of the S&P 500 index. Still growing, but... Novo Nordisk, famous for its Wegovy obesity drug (and its sibling, diabetes treatment Ozempic), unveiled its first half and second quarter of 2025 figures early Wednesday morning. For the quarter, the company booked 76.9 billion Danish kroner ($11.9 billion) in revenue, which was up only marginally on a sequential basis, and 13% higher compared to the same period of 2024. Net income, meanwhile, was down from the previous quarter but up from the year-ago quarter. It rose by 32% year over year to 26.5 billion kroner ($4.1 billion), or 5.96 kroner ($0.92) per share. Both headline numbers missed the consensus analyst estimates, although not by much. Pundits tracking the company were modeling the equivalent of just under $12 billion for revenue, and $0.95 per share on the bottom line. Although Novo Nordisk continues to post double-digit increases thanks largely to Wegovy and Ozempic, it has been in the investor doghouse so far this month. That's because at the end of July, it significantly cut its guidance for both total sales and operating profit. Withering competition Much of this has to do with the intense competition Novo Nordisk is facing due to the runaway success of those medications. These days, pharmacy sector powerhouse Eli Lilly is doing brisk business with a directly competing product, Zepbound, while third parties are copying Wegovy's semaglutide molecule for their own compounded products. The company announced no fewer than 14 new lawsuits on Tuesday, making a total of 146 across 40 U.S. states, to combat the latter. Should you invest $1,000 in Novo Nordisk right now? Before you buy stock in Novo Nordisk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Novo Nordisk wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $619,036!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,092,648!* Now, it's worth noting Stock Advisor's total average return is 1,026% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. Why Novo Nordisk Stock Slipped Today was originally published by The Motley Fool
