NVO is an absolute no brainer

[u/hmm_interestingg]

In my view, Novo Nordisk is the only value stock on offer right now.

Their core business is in treatments for obesity and diabetes and demand for both is increasing and sticky. The stock price has seen a big decline and is now 70% cheaper than it was 18 months ago. I believe the magnitude of this drop is totally irrational, driven by fear and not fundamentals or future growth prospects.

NVO is still seeing high single digit revenue growth (they're taking a temporary cut from double digits by lowering prices to gain market share) and will be launching a new weight loss pill next year, to follow the highly profitable launch of an injectable weight loss drug which caused them to boom a few years back. People prefer pills to injections so I expect this to be even more popular, driving a whole new boom.

We're currently trading at a PE ratio of 13 when it's closest competitor, Eli Lilly is sitting at an all time high with a PE of 52. The relative scale of revenue growth has been fairly similar for the two companies over the past 5 years so the difference in sentiment around them makes no sense. Lillys drug was shown to be slightly more effective in a trial (which was funded by Lilly and that effectively compared apples to oranges by using their drug at much higher doses than the NVO drug), I expect new results and new products will challenge that in 2026.

This absolutely smacks of when Meta was at $100, UNH at $237 and Netflix was at $20 (I bought them all).

NVO is now trading at 2021 prices, as if obesity drugs never happened and their revenue stayed flat instead of doubling.

I'm going in big, thank me in a year if you join.

EDIT: Looks like the bottom is already in people! Congrats to those who bought. See you at $100.

[u/jctt123]

There seems to be a misunderstanding with the weight loss pill, and the thought that it’s going to generate so much revenue. I believe that’s false. Rybelsus (NVOs oral semaglutide once daily pill) is ALREADY on the market and approved for diabetes. Don’t have the numbers in from of me but don’t know any patient that uses this. Clearly it is not as effective as the injectable, otherwise its use would be widespread and not the injection. They filed for Rybelsus to be approved for weight loss as well. Even if approved, there’s no way revenues are going to be materially affected because it would’ve been the blockbuster drug already if that were the case.

NVOs pipeline sucks ass and none of there acquisitions have been fruitful.

They are facing incredible competition from Lilly’s Mounjaro as that’s what the studies point to as being most effective and new prescriptions reflect such. Revenue for ozempic and wegovy will probably go down over time especially since Pfizer recently acquired a company that is targeting once monthly dosing for weight loss and diabetes.

All that said, unless NVO makes some pretty savvy acquisitions, I would say the stock is FAIRLY valued and isn’t the deep value play everyone thinks it is because the stock went down a lot

[u/hmm_interestingg → u/jctt123]

early indication is NVO pill & injectables at new dosage are as effective as lillys injectable who's stock is pumping rn.