UBS downgraded Novo Nordisk to ‘Neutral’ from ‘Buy’ with a price target of DKK 340, down from DKK 600.
NYSE-listed shares of Danish drugmaker Novo Nordisk (NVO) fell about 3% on Tuesday morning after brokerage UBS downgraded the stock over an uncertain outlook for its blockbuster weight-loss drug Wegovy.
UBS downgraded Novo Nordisk to ‘Neutral’ from ‘Buy’ with a price target of DKK 340 ($52.59), down from DKK 600. The new price target still implies a near 9% upside to the stock’s closing price on Monday on the Copenhagen stock exchange.
UBS said that it sees “challenging times” for the company, with its analysis indicating U.S. compounding of weight loss drugs is “here to stay.” This leaves an uncertain outlook for Novo’s Wegovy, the analyst told investors in a research note.
On Stocktwits, retail sentiment around NVO trended in the ‘extremely bullish’ territory over the past 24 hours, while message volume stayed at ‘extremely high’ levels. In fact, according to data from Stocktwits, retail chatter around the stock jumped 144% over the past 24 hours.
Last week, Novo lowered its full-year 2025 outlook, citing lower growth expectations for its blockbuster weight loss drug Wegovy and diabetes drug Ozempic in the U.S. for the second half of the year. The company now expects sales growth of 8% to 14% during the year at a constant exchange rate, down from its previous estimate of 13% to 21%.
Operating profit growth is now expected to be 10% to 16%, down from its previous outlook of 16% to 24%. The new outlook for Wegovy in the U.S. reflects the persistent use of compounded versions of the drug, coupled with slower-than-expected market expansion and competition, the company said.
While the U.S. Food and Drug Administration has prohibited mass compounding for the active component in Wegovy called Semaglutide, unsafe and unlawful mass compounding has continued, the company said, citing its market research.
Novo Nordisk will publish its full financial results for the first six months of 2025 on August 6, before the opening of the NASDAQ Copenhagen stock exchange.
Analysts on average expect the company to report revenue of DKK 77.11 billion and earnings per share of DKK 6.07.
NYSE-listed shares of NVO are down 45% this year and by about 62% over the past 12 months.
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