T4K3.news

BofA downgrades Novo Nordisk due to growth concerns

Bank of America changes its rating on Novo Nordisk from buy to neutral and lowers the price target.

July 30, 2025 at 11:24 AM

Novo Nordisk gets downgrade from BofA as Wegovy growth outlook weakens

Concerns over future growth prompt Bank of America to change its rating on Novo Nordisk.

Novo Nordisk faces challenges as BofA downgrades outlook

Novo Nordisk has received a downgrade from Bank of America, which moved its rating from buy to neutral and lowered the price target to $60. Despite the downgrade, this price suggests a potential upside of over 11% from the stock's value at Tuesday's close. The downgrade stems from worries about the upcoming performance of its key drugs, Wegovy and Ozempic, particularly as market dynamics appear to be shifting. Analyst Sachin Jain highlighted several factors affecting growth, such as persistent competition, regulatory pricing pressures, and the looming loss of exclusivity for its semaglutide products in Canada. Following a nearly 22% drop in U.S.-listed shares, Novo Nordisk's stock has faced significant headwinds this year, decreasing by more than 37%.

Key Takeaways

✔️

Bank of America downgrades Novo Nordisk from buy to neutral.

✔️

Price target cut to $60, suggesting 11% upside potential.

✔️

Analyst warns of tougher growth trends for Wegovy and Ozempic.

✔️

Major threats include competition and regulatory price pressures.

✔️

U.S.-listed shares dropped nearly 22% in one session after lowered forecasts.

✔️

Future performance uncertain amid declining growth expectations.

"We have a Neutral rating on Novo Nordisk given c7% 2026-31E sales CAGR with Wegovy and Ozempic trends looking tougher."

This quote reflects the analyst's cautious outlook on Novo Nordisk's sales trajectory following the downgrade.

"This reflects the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition."

Analyst Sachin Jain explains the factors contributing to the company's revised growth expectations.

"Risk from IRA pricing continues to be a concern as the U.S. seeks to lower drug prices."

This statement highlights the potential impact of U.S. regulations on Novo Nordisk's profitability.

"For Ozempic, Canada patent expiry in FY26E not yet reflected in consensus."

This comment underscores the uncertainties around Ozempic's future performance amid regulatory changes.

The downgrade raises important questions about Novo Nordisk's growth trajectory and market positioning. As Wegovy and Ozempic face increased competition and changing regulations, stakeholders may need to reassess their expectations for the company's future. The concerns around persistent GLP-1 competition and potential pricing cuts, along with the broader economic landscape, indicate a challenging period ahead. While some analysts remain optimistic about the company's long-term potential, the current volatility suggests investors should proceed with caution as new barriers emerge.