Novo Nordisk Stock Decline Continues Amid Analyst Downgrade and Competitive Pressures

Novo Nordisk shares extended their downward trajectory, shedding another 3% today as UBS analyst Matthew Weston withdrew his buy rating. The Danish pharmaceutical giant, known for its blockbuster weight-loss drugs Ozempic and Wegovy, now faces cumulative losses of 31% since its earnings report last week.

Weston's downgrade to neutral reflects growing concerns about compounded GLP-1 drugs flooding the U.S. market. Despite Novo's assurances, UBS's channel checks suggest these cheaper alternatives will persist, potentially capping cash-pay adoption and clouding Wegovy's outlook. The analyst's $52.77 price target offers modest upside from current levels NEAR $47, but warns of slowing sales growth - potentially decelerating to 6% in H2 from 18% in H1.

Competition remains fierce as Eli Lilly's Mounjaro continues gaining market share. At under 14 times earnings, Novo's valuation appears reasonable, but the pharmaceutical landscape is shifting rapidly. The weight-loss drug market, once Novo's uncontested domain, now faces bifurcated pressures: from above with Lilly's superior therapeutics, and from below with compounding pharmacies undercutting prices.