Despite a double beat in its quarterly earnings on May 7, Novo Nordisk A/S (NYSE: NVO) stock is still down nearly 50% in 2025. However, the stock is now trading near its 52-week low and is a discount to itself in several metrics. Analysts believe NVO stock has significant upside, so is this a buying opportunity?
To answer that question requires a realistic, long-term outlook. That’s not something many investors like to hear. In the short term, some factors could weigh down the stock and even send it lower. However, if you’re looking for value in a volatile space, NVO starts to have some appeal.
It’s Getting Noisy in the GLP-1 Market
It may not be a great week to hear your signature product being labeled “the fat shot.” But that’s exactly what happened when President Trump announced his executive order giving the United States “most-favored” nation status regarding drug pricing policy.
This new executive order will affect many medical stocks but is said to put a particular emphasis on drugs that have the “largest disparities and largest expenditures,” which would likely include GLP-1 drugs. It also comes after the president had dinner with the CEO of Eli Lilly & Co. (NYSE: LLY) in Mar-a-Lago. At that time, Lilly CEO David Ricks remarked that raising drug prices in other developed nations would be a key strategy to reduce costs in the United States.
Novo Nordisk is headquartered in Denmark. The company was the first to have an approved GLP-1 drug for obesity in the market, and it has a 72% market share in the GLP-1 space.
That means Novo Nordisk has the most to lose of the two companies that make up a duopoly in this market. Novo Nordisk is facing increased competition, including recent test results showing that the GLP-1 space, the new oral GLP-1 drug from Eli Lilly, was more effective than Novo Nordisk’s Rybelsus.
Rybelsus is currently approved only for treating type 2 diabetes (T2D). Novo Nordisk has submitted an application for an oral version of Wegovy, which the FDA is expected to approve by year-end.
However, Novo Nordisk isn’t leaving anything to chance. The company has signed a $2.2 billion deal with Septerna (NASDAQ: SEPN). The two companies will co-develop up to four new oral small-molecule therapies, one of which will target obesity.
A New Deal With CVS Adds Intrigue to the Situation
In early May, CVS Health Corp. (NYSE: CVS) announced it will remove Zepbound from its standard formulary on June 1, 2025, continuing to offer only Wegovy for weight-loss treatment. CVS Health owns the largest pharmacy benefit management (PBM) business in the United States.
In its earnings report, Novo Nordisk management said it did not approach CVS about exclusivity. That was an independent decision of CVS.
NVO Stock Appears to Be Undervalued
With a forward price-to-earnings (P/E) ratio of around 17x, Novo Nordisk is trading at a discount to its trailing twelve-month (TTM) average as well as its three- and five-year averages. The same is true of the company’s price-to-sales (P/S) and price-to-book (P/B) ratios.
[content-module:Forecast|NYSE: NVO]Then there’s the opinion of analysts. The Novo Nordisk analyst forecasts on MarketBeat show a consensus Hold rating.
The price target of $135 represents a 108% upside from the stock’s current level and would reverse much of its decline over the last 12 months.
However, as of May 14, 2025, NVO stock has not reclaimed its 50-day simple moving average at around $70. This has been acting as a point of resistance in the last year. That said, the stock is only down about 1.5% in the last month despite a sharp increase in short interest.
Despite low short volume relative to float, a 31% rise in short interest over 30 days signals growing bearish sentiment.
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