Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 27 Feb, 26 | NVO | Buy | USD 37.62 | USD 39.5 | USD 42.0 | 60 days | Closed |
11.84%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Novo Nordisk A/S, a healthcare company, engages in the research, development, manufacture, and marketing of pharmaceutical products worldwide. It operates in two segments, Diabetes and Obesity care, and Rare Disease. The Diabetes and Obesity care segment provides products in the areas of insulins, GLP-1 and related delivery systems, oral antidiabetic products, obesity, glucagon, needles, and other chronic diseases. The Rare Disease segment offers products in the areas of haemophilia, blood disorders, endocrine disorders, growth disorders, and hormone replacement therapy. The company has a collaboration agreement with Gilead Sciences, Inc.; and research collaboration with Novo Nordisk to discover cell-specific carriers of nucleic acid therapeutics. The company was founded in 1923 and is headquartered in Bagsvaerd, Denmark.
Rare Disease Sales Expansion: Rare disease sales increased to DKK 19.6 billion in FY25, up from approximately DKK 18.0 billion in FY24, reflecting 9% growth at constant exchange rates
Obesity Care Growth Acceleration: Obesity care sales reached DKK 82.3 billion in FY25, compared with approximately DKK 63–66 billion in FY24, representing 31% growth at constant exchange rates
Decline in Return on Invested Capital (ROIC): Return on invested capital declined sharply to 39.3% in FY25 from 63.9% in FY24, a reduction of 2,460 basis points
Operating Profit Contraction: Operating profit declined slightly to DKK 127,658 million in FY25 from DKK 128,339 million in FY24, reflecting a 0.5% decrease year-on-year
Novo Nordisk faces material investment risks arising from intensifying competition in GLP-1 therapies, pricing and reimbursement pressures, margin compression from scaling and restructuring, potential patent expirations for semaglutide, and execution risks associated with its obesity-focused transformation strategy
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 37.62 | 33.0 | 39.5 | 42.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue Growth Moderation Amid Elevated Base: In FY25, Novo Nordisk reported net sales of DKK 309,064 million, reflecting a 6.4% increase as reported and 10.3% growth at constant exchange rates (CER), compared with DKK 290,403 million in FY24. While revenue expansion remained solid, the pace moderated significantly relative to the 25.0% growth recorded in FY24, indicating a normalisation phase following prior hyper-growth, particularly within obesity care.
Operating Profit Impacted by Restructuring Costs: Operating profit declined marginally by 0.5% to DKK 127,658 million in FY25 versus DKK 128,339 million in FY24. At CER, operating profit increased by 6%; however, performance was adversely affected by approximately DKK 8 billion in one-off restructuring costs related to the company-wide transformation programme. Excluding these costs, operating profit growth would have been materially stronger.
Sustained Net Profit Expansion: Net profit rose 1.4% year-on-year to DKK 102,434 million in FY25 from DKK 100,988 million in FY24. Profit before tax increased 2.6% to DKK 130,540 million. Despite margin compression, disciplined cost management and continued revenue scale supported bottom-line resilience.
Therapeutic Segment Performance: Obesity care remained the primary growth driver, with sales increasing 31% at CER to DKK 82.3 billion in FY25. Rare disease sales rose 9% at CER to DKK 19.6 billion. Diabetes care sales remained broadly stable in reported terms but grew 4% at CER, reflecting competitive pressures and slower GLP-1 class growth in the US market.
Margin Compression and Cost Trends: Gross margin declined to 81.0% in FY25 from 84.7% in FY24, reflecting product mix shifts, pricing dynamics, and scaling costs. Operating margin also compressed to 41.3% from 44.2% in FY24. Research and development costs increased to 16.8% of sales (FY24: 16.6%), underscoring continued pipeline investments.
Cash Flow Recovery and Capital Allocation: Free cash flow improved to DKK 28,295 million in FY25 compared to negative DKK 14,707 million in FY24, reflecting stabilised working capital and operating performance. The company returned DKK 51,975 million to shareholders via dividends and executed DKK 1,388 million in share repurchases. Dividend per share increased to DKK 11.70 from DKK 11.40 in FY24.
Operational Restructuring and Workforce Realignment: As part of a transformation plan, Novo Nordisk reduced its workforce by approximately 9,000 positions, resulting in total employees declining to 69,505 in FY25 from 77,349 in FY24. The restructuring is expected to generate annualised savings of DKK 8 billion from FY26 onwards, enabling reinvestment into obesity and diabetes growth initiatives.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Novo Nordisk. (NYSE: NVO) at the closing market price of USD 37.62, as on Feb 26, 2026
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Biotechnology
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| NVO Novo Nordisk A/S |
-0.71 1.41% | 49.61 | 41.58 | 31.15 | 2.13 | 32.99 | 2.11 | 4.70 |
| NONOF Novo Nordisk A/S |
-0.64 1.26% | 50.10 | 41.06 | 31.25 | 2.08 | 33.11 | 2.11 | 4.70 |
| VRTX Vertex Pharmaceuticals Inc |
-5.15 1.06% | 480.50 | 29.67 | 24.33 | 10.38 | 5.83 | 9.33 | 20.00 |
| REGN Regeneron Pharmaceuticals Inc |
-4.54 0.67% | 672.15 | 29.07 | 20.12 | 7.57 | 3.82 | 6.95 | 19.42 |
| MRNA Moderna Inc |
-2.33 3.77% | 59.49 | - | 32.47 | 5.88 | 2.91 | 4.87 | -10.0256 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on February 27, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
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Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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