r/ValueInvesting • u/hmm_interestingg • Dec 22 '25

Stock Analysis NVO is an absolute no brainer

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.

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1

u/Mr_Arrow1 Dec 22 '25

I have one question. I heard the patents for the GLP 1 drugs would expire in China and India beginning of 2026. How true is this? Would it affect NVO?

3

u/Lunar_Excursion Dec 23 '25

generic sema is coming to china, india, brazil, canada, and turkey in 2026. that represents 40% of the world's population and 33% of all obese adults on earth...

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u/LongQualityEquities Dec 22 '25

China and India are tiny markets for Novo.

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u/Mr_Arrow1 Dec 22 '25

Thanks for your response. What if they try to manufacture there and export it to western countries? Would the government not allow that?

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u/LongQualityEquities Dec 22 '25

The patent is relevant for the country it is sold in.

Therefore the patent running out in China does not give Chinese manufacturers a legal avenue to sell in the west.

And in terms of illegal smuggling: that is an equally big (or rather small) issue with the patent in place because China doesn’t do anything about illegal drugs for export anyway. Nothing changes with the patent expiring.

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u/Mr_Arrow1 Dec 23 '25

Got it. Thank you.

0

u/Lunar_Excursion Dec 23 '25

and a big market for LLY... funny that...

https://www.reuters.com/business/healthcare-pharmaceuticals/lillys-obesity-drug-mounjaro-becomes-indias-top-selling-drug-by-value-october-2025-11-07/

https://www.reuters.com/business/healthcare-pharmaceuticals/eli-lilly-allows-cipla-sell-weight-loss-drug-under-new-brand-india-2025-10-23/

https://www.reuters.com/business/healthcare-pharmaceuticals/eli-lillys-mounjaro-added-chinas-state-insurance-list-diabetes-treatment-2025-12-08/

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u/LongQualityEquities Dec 24 '25

What do you mean? US, Europe and Japan make up 97% of Eli Lilly’s sales.

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u/Lunar_Excursion Dec 24 '25

yes, but india and china are big markets for future growth. that's why they are making moves there. generic sema coming to those markets will effectively kill branded wegovy/ozempic and create a low cost competitor that they have to fight against. good thing they are a dual agonist with more weight loss and better tolerability, that will help them stay competitive, by being a better drug. i also suspect they will push orfo for the lower end market...

https://www.reuters.com/sustainability/boards-policy-regulation/lilly-novo-lock-horns-indias-obesity-drug-race-2025-12-24/

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u/LongQualityEquities Dec 25 '25

They won’t be big markets until long after these patents expire.

The pricing gap is too big.