Citi cuts Novo Nordisk price target to 296 crowns

Citi Research cut its price target on Danish drugmaker Novo Nordisk to 296 Danish crowns from 310, keeping a neutral rating on the stock. The bank cited guidance from Novo's recent Capital Markets Day for broadly stable margins through 2030, which analysts said leaves little room for margin growth amid higher research and development spending. As a result, Citi lowered its adjusted operating profit forecasts for 2028 to 2030 by 2% to 4%, cut its valuation multiple to 14 times 2027 earnings from 15 times, and reduced its expected 2027 to 2030 annual earnings-per-share growth rate to 9% from 12%.

For the nearer term, Citi raised its adjusted operating profit forecasts by 2% to 3% for 2026 and 2027, lifting adjusted sales forecasts by 3% for 2026 and 1% for 2027. The bank increased its peak sales estimate for the oral Wegovy pill to $13 billion from $10 billion, noting that 1 million packs have been distributed in the UK since July. Novo intends to launch the pill in at least 20 countries by the end of 2027, covering two-thirds of its current obesity market.

Novo reports third-quarter results on Nov. 4. Citi projects revenue of kr73.5 billion, down 4% at constant currency, alongside oral Wegovy pill sales of kr5.3 billion, which is 16% above consensus of kr4.5 billion. Citi noted headwinds including a roughly kr3 billion rebate adjustment and stocking benefit in the prior-year period, a 15% drop in U.S. Ozempic prescriptions, price declines for injectable Wegovy, generic competition in Canada and Brazil, and no real impact from Medicare GLP-1 eligibility.

Citi expects adjusted operating profit to rise 18% at constant currency due to kr9 billion in restructuring charges a year earlier, but estimated it would fall roughly 15% excluding those charges. Citi also forecast IFRS earnings per share of kr4.15, down 8% from a year earlier, driven by an impairment following the failure of ziltivekimab in the ZEUS trial. The analysts warned that pipeline competition from Lilly's retatrutide and eloralintide, Roche's enicepatide, Pfizer's MET-097i, and AstraZeneca's elecoglipron could keep investors cautious.