- Price
- $38.17 → $38.80(+1.7%)
- Discount
- 9.1% → 7.6%(−1.5 pts)
- Thesis
- NVO trades around $38.17, about 9% below its $42.00 fair value estimate. The market is worriedprices Novo at a discount because it fears Novo is losing the obesity-drug race to Eli Lilly:. Lilly's tirzepatide (sold as Zepbound and Mounjaro) beat semaglutide in a head-to-head trial and overtook. Lilly has already overtaken Novo in ex-US GLP-1 market share in 2026, whilea class of diabetes and weight-loss drugs. Novo's full-yearown 2026 guidance, even after two upward revisions during the year, still points to adjusted sales and operating profit coming in flat to down 6% at constant exchange ratesfor the year, even after two upward revisions. Generic competition isversions of semaglutide are also arriving faster than expected: semaglutide's patent lapsed in Canada and China in early 2026 outside the US, andwith Canada approved itsapproving a first generic version in April 2026. At its September 21, 2026 Capital Markets Day, management guided to 2026-2030 revenue growth only in line with a group of large pharmaceutical peers, not aboveahead of them, and. That told the stock fell about 7market Novo itself expects no better than average industry growth from here.7% that day. Why For the gap could stillto close: new CEO Mike Doustdar is cutting about 9,000 jobs two things need to save roughly $1happen together.3 billion a year, the The Wegovy pill sold about twice what analysts expected in its first full quarter onneeds to keep growing faster than the market, andolder injectable franchise shrinks. CagriSema, Novo's next-generation obesity and diabetes drug, beatneeds to reach the market and take share back from Lilly's. CagriSema already beat tirzepatide on weight loss in a Phase 3 head-to-head trial, withand an FDA obesity decision is due in Q4the fourth quarter of 2026. Medicare coverage of obesity drugs for some patientsNew CEO Mike Doustdar is also cutting about 9, scheduled000 jobs to begin in mid-2026 underfund the new US pricing deal, could also expand the market both companies compete forturnaround. If the FDA approves CagriSema is approvedon schedule and theits launch goes well alongside continued Wegovy pill keeps growing faster than the older injectable Ozempic and Wegovy franchise shrinksgrowth, earnings could re-accelerate and the discountgap could closestart closing over the next two to four quarters. The honest counter-case: Lilly's clinicalClearer evidence should come by the Q3 2026 report and commercial momentum in obesity has been stronger for moreinto 2027. If Lilly keeps taking share faster than a yearNovo can respond, or generic semaglutide could spreadcompetition spreads to more markets than expected, and managementthe discount could persist well beyond 2026. Management's own 2030 targets suggest Novo itself expects no better than average industry growth from here, notlonger assume a return to itsNovo's old growth ratesrate.