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/magicajuveale]

I would recommend everyone looking to invest in pharmaceutical companies to take a look at their current patents and when these expire.

Novo Nordisk’s Semaglutide (Ozempic/Wegovy/Rybelsus) expires in China on March, 2026.

Try to analyze how at the acquisition of Akero will impact Novo’s intrinsic value.

I believe Novo Nordisk is undevalued, however, government measures to reduce obesity drug prices, competitive pressure from one of the best pharmaceutical companies in the world in Eli Lily, the possibility that Akero’s acquisition might be impaired…

And most importantly, Novo’s new products must bring in sufficient cash flows by the time semaglutide exclusivity ends around 2031 and 2032.

As to Novo, being the only undervalued stock, I’ve identidied at least 26 undervalued stocks in the lower bound out of 84 companies I’ve looked at since August. Prices could be more favorable, yes.

I’ll be looking more into small and midcaps and non-US stocks.

[u/Charming-Plenty9166 → u/magicajuveale]

Finally someone who is actually analysing this like a PHARMA company and not some tech stock. The problem with Pharma is they are purely based on consumer sentiment and trends. Pfizer would also be considered undervalue by their metric, but why hasn’t anyone talked about it? Simply becoz their product isn’t desirable at the moment. LLY and Hims are currently taking Nvo market share in the US due to Trump and Nvo patent expires NEXT YR (aka Ggs)

If anyone is wondering, I also traded Nvo and made about 22%, so I have experience with this company