Novo Nordisk Stock Tumbles Again: What’s Dragging Big Pharma Down?

Another red day for Novo Nordisk as bears maul the healthcare giant. Here’s why Wall Street’s dumping its weight-loss golden goose.

Patent cliffs and pipeline panic

Generic rivals circle Ozempic like vultures—while R&D setbacks spark ‘innovation drought’ fears. The market hates uncertainty more than a crypto bro hates bear markets.

Regulatory headwinds intensify

FDA scrutiny tightens on GLP-1 drugs just as Novo bets the farm on obesity treatments. Because nothing says ‘stable investment’ like regulatory roulette.

Short-term pain for long-term gain?

Analysts slash targets amid pricing pressures… but diabetes demand won’t vanish overnight. Maybe hedge funds should’ve diversified beyond memecoins and miracle drugs.

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What UBS says about Novo Nordisk

UBS analyst Matthew Weston removed his buy rating on Novo Nordisk stock this morning, downgrading the shares to neutral and setting a price target of about $52.77, as Street Insider reports. In last week's earnings report, you see, Novo dismissed worries that competition from drug compounding firms, making and selling cheaper versions of Ozempic under their own names, is a significant threat from its business -- but UBS begs to differ.

"Following expert channel checks, we expect GLP1 compounders to remain in the US, which limits cash-pay uptake and leaves an uncertain outlook for US Wegovy," warned Weston. At the same time, the analyst says Novo is continuing to lose market share to rival(NYSE: LLY) and its own weight loss drugs such as Mounjaro.

Is Novo Nordisk stock a sell?

Weston's downgrade still values Novo Nordisk stock above its current share price of $47 and change, however. Moreover, Novo Nordisk stock currently costs less than 14 times earnings.

Although Weston warns that sales growth is slowing to perhaps 6% in the second half of the year from 18% in the first half, that still averages out to about a 12% annual growth rate -- perhaps not explosive, but still respectable. And between the growth rate and the 3.3% dividend, we're looking at a total return of more than 15% on this stock, which makes a 14 P/E ratio look cheap.

Despite (or even because of?) the falling share price, I'd still be a buyer of Novo Nordisk stock.