Novo Nordisk

Following a reassessment of the short-term trends after the Q1 results, and notably the impact from compounders (now over) and a more cautious stance regarding potential competition going forward (notably a potential price impact), we have adjusted our estimates by 4% in 2025 and by 11% in 2026.  Nonetheless, we still expect Novo’s bottom line to grow at a c.13% CAGR over 2024-27. We have also adjusted our target price to DKK793 per share which still leaves a more than 60% upside. 

Yesterday, the FT revealed that Parvus, a UK-based activist investor with a strong track record, was building an undisclosed stake in Novo Nordisk. We see that as good news and in our view underlines the cheap valuation of Novo Nordisk. 

Novo remains in our expert's opinion the best play in the pharma sector considering its risk/reward profile. Following its massive drop in share price and despite our earnings cut, the stock now trades on PE25 and 26 of 17.9x and 15.2x respectively down to 13.4x in 2027. Novo and Roche are his top picks in the sector.

It is also worth noting that yesterday, US health secretary Robert F. Kennedy (RFK) Jr. fired all 17 members of a top US vaccine advisory committee, claiming that they had a conflict of interest. The committee has independent doctors and health officials who do not work for the government. RFK Jr. has been a vocal critic of vaccines.

These kinds of extreme moves, whatever their result in the longer term, do not bode well for the sentiment around vaccine makers (mainly Sanofi and GSK in our coverage) in the near term.