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Investing.com - Novo Nordisk (NYSE:NVO) shares declined after BMO Capital reiterated its Market Perform rating and $50.00 price target on the pharmaceutical company amid a major restructuring announcement. According to InvestingPro data, the stock currently trades below its Fair Value, with analyst targets ranging from $49.93 to $90.08.
The Danish drugmaker plans to cut approximately 9,000 positions, representing about 11% of its 78,000-person workforce, with 5,000 roles being eliminated in Denmark alone, according to BMO Capital’s research note.
The restructuring initiative, led by new CEO Doustdar, aims to deliver estimated savings of DKK 8 billion (approximately $1.28 billion) by year-end 2026.
Novo Nordisk has revised its EBIT growth expectations at constant exchange rates downward to 4-10%, compared to its previous guidance of 10-16%.
BMO Capital described the restructuring as a "bold" move, noting that "the status quo was not delivering for patients or shareholders," while emphasizing the need to see "concrete results" beyond this initial step.
In other recent news, Novo Nordisk has received Canadian approval for its diabetes drug Ozempic to be used for additional purposes related to kidney disease. This approval allows the drug to be prescribed for reducing the risk of kidney failure and disease progression in diabetes patients with chronic kidney disease. In a significant development, Novo Nordisk has also partnered with GoodRx to offer Ozempic and Wegovy at a reduced price of $499 per month for eligible self-paying patients. This collaboration marks the first time Ozempic is available at this self-pay price point and is effective immediately across over 70,000 retail pharmacies nationwide. Meanwhile, TD Cowen has lowered its price target for Novo Nordisk from $105 to $70, while maintaining a Buy rating, following discussions with the company’s leadership about ongoing challenges and opportunities. Additionally, Novo Nordisk’s Chairman, Helge Lund, recently met with China’s Vice President, Han Zheng, in Beijing, where they discussed potential cooperation between China and Denmark. These developments come amid the U.S. FDA’s creation of an import alert system to block potentially dangerous GLP-1 ingredients from unverified foreign sources, ensuring a secure drug supply chain.
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