UBS has lowered its rating on Novo Nordisk (NYSE:NVO) from 'buy' to 'neutral', slashing the price target to DKK340 from DKK600.
The downgrade comes after what UBS described as “challenging times” for the Danish pharmaceutical group, citing a sharp slowdown in growth for its flagship GLP-1 medicines, intensifying competition from Eli Lilly, and persistent pricing pressures.
The UBS team pointed to an expected drop in sales growth to just 6% in the second half, down from 18% in the first.
Analysts flagged continued loss of market share to Eli Lilly’s Mounjaro, particularly in the US, and noted that Ozempic, Novo’s leading diabetes treatment, appears to have plateaued despite strong brand awareness.
UBS expects compounded GLP-1 products to remain widely available in the US, limiting the cash-pay opportunity for Novo’s Wegovy obesity drug.
US regulatory action appears unlikely in the near term. Looking ahead, UBS forecasts sales growth of 6.2% a year to 2030, with earnings per share growth of 7.3% supported by share buybacks.
The analysts also warned of margin pressure from price cuts linked to US Medicare reforms, and said visibility on a new CEO’s impact is limited.
Novo's shares fell DKK1.10 to DKK311.9.