Svenska Handelsbanken has cut Novo Nordisk (NYSE:NVO)to hold from buy and slashed its target price to DKK 330 from DKK 480, citing a breakdown in confidence over the company’s direction and recent governance changes.
The shares were down 2% at DKK 316.
The downgrade follows what the bank called “a series of events that never really fitted with our thesis,” including the forced change of chief executive, board upheaval and the acquisition of Akero.
Analyst Mattias Häggblom said the moves, together with Novo’s attempt to acquire US biotech Metsera, had made it “difficult to follow the logic” behind management’s strategy.
The shift, he wrote, means Handelsbanken “cannot justify our original investment case.” The bank also questioned the wisdom of Novo’s recent push to double down on obesity and diabetes treatments, saying this revived earlier concerns about overreliance on its blockbuster semaglutide franchise.
Handelsbanken warned that further downgrades to 2025 guidance were possible, with earnings forecasts likely to keep drifting lower as price negotiations with the Trump administration under the Inflation Reduction Act approach.
Risks also include a slower-than-expected recovery in prescription growth and potential setbacks in key late-stage drugs such as CagriSema and amycretin.
At 323 DKK, the shares trade close to the bank’s new valuation. “Stock remains cheap versus its history, but earnings revisions are likely to continue south, which leaves the valuation argument thin,” Häggblom said.
Some potential upside remains from upcoming Alzheimer’s trials for semaglutide, due before year-end, though Handelsbanken noted these were never part of its base case.
For now, the downgrade marks a pause in confidence for what had been one of Europe’s most widely held growth stories.