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Investing.com - HSBC downgraded Novo Nordisk (NYSE:NVO) (NOVOB:DC) from Buy to Hold on Monday, slashing its price target to DKK360.00 from DKK680.00 following the company’s guidance cut.
The downgrade comes after Novo Nordisk reduced its 2025 operating profit guidance by approximately 7% on July 29, with the mid-point of the new guidance range suggesting a mid-single digit exit growth rate for 2025.
HSBC cited the continued illegal selling of weight loss drugs by U.S. compounders despite FDA bans, which has prevented Novo Nordisk from regaining expected market share in the GLP-1 drug market.
The research firm acknowledged its previous Buy rating was incorrect, noting that "our assumption that with FDA’s ban on compounding, Novo might re-gain market share has not played out" and that there are "limited reasons for this situation to change in a short order."
HSBC also raised concerns about whether the consensus GLP market size estimate of over USD120 billion might be significantly overestimated, questioning the safety of medium-term pricing assumptions given the capacity investments in the space.
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