Shares in Novo Nordisk (NYSE:NVO) drew a cautious reception from Citi following first-quarter results that beat consensus expectations, with the bank raising its target price but retaining a neutral rating as concerns over portfolio price erosion and long-term obesity market competition outweigh a stronger-than-expected launch of the Wegovy pill.
Citi lifted its target price to DKK290 in line with modest earnings upgrades of 2-3% for financial years 2027 to 2031, driven primarily by higher Wegovy pill estimates, while leaving its 2026 earnings per share forecast unchanged after cutting its sales estimate by 4% and operating income by 7% in constant currency.
The bank's full-year 2026 Wegovy pill sales estimate of $2.7 billion and peak estimate of $8 billion both sit above the company's consensus of $1.7 billion and $7.1 billion, respectively, reflecting confidence in the strength of the oral GLP-1 launch.
Citi described the launch momentum, continued volume growth in injectable Wegovy and the apparent lack of any impact from rival Foundayo's entry as encouraging, and said Novo's messaging around brand strength and the acceleration of oral zenagamtide, also known as amycretin, into phase three trials was well-judged.
The neutral stance is maintained on two principal concerns: Citi's 2027 earnings per share estimate remains 7% below consensus, as the bank expects continued portfolio price erosion, including most-favoured-nation pricing in diabetes to compress both sales and margins; and significant uncertainty persists over mid-to-long-term pricing dynamics and competitive intensity in the obesity market.