Deutsche Bank cuts Novo Nordisk to Sell after earnings, shares dip

Investing.com -- Deutsche Bank downgraded Novo Nordisk (NYSE: NVO) (CSE:NOVOb) to Sell from Hold and cut its price target by 9% to 265 Danish crowns from 290 crowns, flagging persisting concerns over the company’s growth trajectory. The stock fell more than 3% in Copenhagen trading Thursday.

Analyst Emmanuel Papadakis said the downgrade follows Novo’s "mixed" second-quarter earnings earlier this month, along with subsequent takeaways from a London sellside meeting, Deutsche Bank’s CEO non-deal roadshow in Frankfurt, and recent prescription trends.

Novo raised its full-year profit and sales outlook in a surprise early earnings release, with both metrics now seen in a range of zero to minus 6% at constant exchange rates versus 2025, up from a prior range of minus 12% to minus 4%. Investors, however, focused on a narrow sales miss for the company’s new Wegovy pill and a trial setback for its next-generation obesity drug, CagriSema.

Sales of the Wegovy pill came in at 3.22 billion Danish crowns ($497 million), just below the 3.3 billion crowns analysts had expected, dampening hopes that its early momentum would continue to beat expectations.

Papadakis said Deutsche Bank cut its price target in line with "high-single-digit mid-term revenue cuts," pointing to several factors weighing on the outlook. These include ziltivekimab now being "effectively out of the picture," a "limited" Medicare prescription bump, and "persisting concerns on the scope for a return to growth in 2027 and a large cliff problem further out."

The downgrade marks the second ratings cut from Deutsche Bank this year. The bank had already lowered Novo to Hold in February, following what Papadakis described at the time as the company "throwing in the towel" after a miss on its R4 trial data.

Novo continues to compete with rival Eli Lilly for share of the obesity drug market, with investors watching for signs that the company’s recent turnaround can be sustained and that the Wegovy pill can support longer-term growth. Papadakis noted that "information uncertainty remains high" ahead of Novo’s Capital Markets Day, scheduled for September 21.

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