Novo Nordisk price target lowered to $50 from $55 at BMO Capital

Investing.com - BMO Capital has lowered its price target on Novo Nordisk (NYSE:NVO) to $50.00 from $55.00 while maintaining a Market Perform rating on the stock. The pharmaceutical giant, currently trading at $45.38, has seen its shares decline by approximately 47% over the past six months, though InvestingPro analysis suggests the stock is currently undervalued.

The firm cited Novo Nordisk’s shifting strategy, which includes redoubling efforts against compounders and refocusing its commercial approach around obesity and metabolic treatments amid competitive headwinds. As a prominent player in the pharmaceuticals industry, the company maintains strong fundamentals with an impressive 84% gross profit margin and has consistently paid dividends for 37 consecutive years.

BMO Capital noted that while it appreciates the company’s efforts to "right the ship and reshape the narrative," it continues to view Novo Nordisk’s execution story as "more of a show me" situation.

The analyst’s caution comes as the recent guidance cut remains "fresh in the minds of investors," according to the research note.

BMO Capital’s decision to reduce the price target reflects "continued compounding and branded competitive headwinds to Novo’s incretin business."

In other recent news, Novo Nordisk has been involved in significant legal and financial developments. The company announced 14 new lawsuits against firms producing and marketing compounded semaglutide products, targeting telehealth providers for allegedly influencing medical decisions improperly. This legal action is part of a broader effort, with 132 complaints filed across 40 states and resulting in 44 permanent injunctions. On the financial front, Novo Nordisk’s stock has faced several downgrades from major financial institutions. UBS downgraded the stock from Buy to Neutral, citing concerns over growth prospects in the GLP1 market and commercial execution challenges. HSBC also downgraded Novo Nordisk to Hold, following a reduction in the company’s 2025 operating profit guidance by approximately 7%. Barclays (LON:BARC) lowered its rating from Overweight to Equalweight, attributing the downgrade to company-specific issues in the obesity market. Despite these downgrades, Barclays maintained its Equalweight rating amid news of a Medicare pilot program for GLP-1 drugs, which includes Novo Nordisk’s Ozempic and Wegovy.

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