The broker retains its hold rating, warning that overall portfolio growth may stall even as the oral weight-loss pill gains traction
Jefferies has trimmed its price target on Novo Nordisk (NYSE:NVO), the Danish pharmaceutical giant, to DKK270 from DKK275, maintaining a 'hold' rating ahead of first-quarter results.
The change came as the broker flagged mounting uncertainty around GLP-1 pricing, oral Wegovy's launch trajectory and the risk that the new pill cannibalises rather than grows the overall franchise.
GLP-1 refers to glucagon-like peptide-1, the class of drugs that underpins Novo's Ozempic and Wegovy treatments for diabetes and obesity, respectively, and which has driven the company's extraordinary growth in recent years.
The central concern in the Jefferies note is that higher oral Wegovy prescription estimates for 2026, now forecast to generate around 12 billion Danish krone in first-year sales, are being largely offset by cuts to the injectable portfolio following weaker-than-expected US prescription trends.
The broker sees the total GLP-1 franchise failing to grow in aggregate, with oral uptake pulling patients away from injectable products rather than attracting new ones.
That risk is compounded by the April launch of orfoglipron, an oral obesity drug from Eli Lilly, the US pharmaceutical company and Novo's principal rival, which Jefferies warns could meaningfully decelerate momentum.
The broker also flags the potential for first-quarter guidance to be narrowed toward the top of Novo's existing range, but characterises any such move as cosmetic, having previously judged the initial guidance to be conservative.
Longer term, Jefferies draws an uncomfortable parallel with AbbVie's experience around the Humira patent cliff, noting that pharmaceutical companies facing major loss-of-exclusivity events have historically traded at 7 to 8 times earnings, suggesting meaningful further downside risk even after Novo's dramatic de-rating from a 130% sector premium to roughly in line with peers today.
The broker's downside scenario of DKK200 per share, implying a further 16% fall from the current price of DKK237.45, would be triggered by a poor oral Wegovy launch combined with convincing data from rival oral GLP-1 compounds in development.
At the current price, Novo trades on around 13 times Jefferies' 2027 earnings estimate, a level the broker considers difficult to defend without evidence that the overall GLP-1 franchise can resume growth and a credible pipeline beyond semaglutide, the active ingredient in both Ozempic and Wegovy.