Morgan Stanley lowered its rating on Novo Nordisk (NYSE:NVO) from Equal-weight to Underweight and cut its price target from DKr 380 to DKr 300, citing a “tough path ahead” for the pharmaceutical company amid slowing prescription trends, rising competition, and pricing pressures.
Novo Nordisk shares slipped more than 3% in premarket trading on Monday in the U.S.
Analysts at the bank highlighted stagnating U.S. prescriptions for key drugs Ozempic and Wegovy, alongside a continued decline for Rybelsus. Although weekly Wegovy volumes increased earlier this year, they have remained flat over the past nine weeks, signaling limited growth momentum.
“The lack of momentum in U.S. prescriptions for Wegovy, Ozempic and Rybelsus make us cautious on the short-term growth profile,” the team led by Thibault Boutherin wrote.
Morgan Stanley now expects Novo Nordisk’s group sales to grow around 5% in 2026, below the consensus forecast of 8.5%. The analysts also project 7–8% lower than consensus for 2027 group sales and EBIT, warning that they do not anticipate the stock performing ahead of potential negative earnings revisions.
The team expects next year’s guidance to suggest single-digit growth at the midpoint, with downside risks driven by a packed near-term catalyst schedule. Key events include trial results from the semaglutide Alzheimer’s program, which Morgan Stanley estimates has a 75% chance of failure; a Medicare Part D pricing announcement by November that could slash U.S. Ozempic net prices by 50%; and a head-to-head trial of CagriSema versus Eli Lilly’s (NYSE:LLY) Zepbound.
Competition is set to intensify. Eli Lilly’s Mounjaro continues to capture share in the diabetes segment, reaching 56% of the U.S. GLP-1 market. In obesity, Lilly’s tirzepatide and the upcoming orforglipron pose further challenges, while compounded GLP-1s in the U.S. and generics in markets like Canada, China, and Brazil threaten Novo’s international revenue.
Novo’s planned oral Wegovy launch in 2026 could generate $1 billion, but analysts highlighted a “positioning conundrum” between protecting injectable sales and pricing competitively against Lilly’s oral rival.
At its revised target, Novo would trade at roughly 11 times 2028 earnings, aligning more closely with large European peers facing patent cliffs, such as Novartis and Sanofi.
“As the window before semaglutide U.S./EU LOE narrows, we expect valuation multiples to compress,” the analysts said.
Overall, Morgan Stanley views Novo as a relative underperformer within its coverage universe, noting that consensus estimates are likely to be revised downward over the next year, especially as restructuring effects have yet to be fully priced in by the market.
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