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Investing.com - UBS downgraded Novo Nordisk (NYSE:NVO) (NOVOB:DC) from Buy to Neutral and slashed its price target to DKK340.00 from DKK600.00, citing concerns about the company’s growth prospects in the GLP1 market.
The downgrade follows UBS channel checks suggesting GLP1 compounders will remain in the US market, potentially limiting cash-pay uptake and creating uncertainty for US Wegovy sales. The investment bank also pointed to Novo Nordisk’s commercial execution challenges, including losing market share to competitor Eli Lilly (NYSE:LLY).
UBS forecasts Novo Nordisk’s sales growth will slow to approximately 6% in the second half of the year, down from 18% in the first half, despite significant unmet need in the obesity treatment market.
The research note highlighted that Ozempic appears to have plateaued earlier than expected despite strong brand awareness, which UBS interprets as indicating stronger doctor reception to Eli Lilly’s competing product Mounjaro.
While potential Medicare reimbursement for GLP1 obesity treatments under a Trump administration could boost volume, UBS cautioned that most-favored-nation pricing demands could force US cash sales to match European prices, potentially reducing the value proposition for Novo Nordisk.
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