Morgan Stanley Downgrades Novo Nordisk Amid GLP-1 Demand Concerns

Morgan Stanley has downgraded Novo Nordisk's stock to 'underweight' from 'equal weight,' slashing its price target to $47 from $59. The MOVE reflects growing skepticism about the sustainability of demand for the company's blockbuster GLP-1 drugs, Ozempic and Wegovy, as well as doubts about their potential efficacy in treating Alzheimer's disease.

U.S.-listed shares of Novo Nordisk dipped slightly following the downgrade, extending year-to-date declines. Prescription growth for Ozempic and Wegovy has plateaued in the U.S., with Morgan Stanley forecasting a decline in the GLP-1 diabetes franchise by 2026 due to market share erosion and pricing pressures.

The bank's analysis highlights broader challenges for Novo Nordisk, including looming generic competition overseas and uncertain clinical trial outcomes for its experimental Alzheimer's treatment. Investors weighing the stock's nearly 30% decline this year now face a sobering reassessment of its growth trajectory.