Novo Nordisk had a rough stretch in 2025 that eventually led to it “firing” its CEO.
The new Wegovy pill looks like a game-changer for the pharmaceutical giant.
That bodes well for a stock with a compelling valuation.
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Novo Nordisk (NYSE: NVO) essentially made the obesity drug market the surging growth opportunity it is today with the viral success of its GLP-1 agonists, Ozempic for Type 2 diabetes and Wegovy for chronic weight management. But the company hit a tough stretch, marred by competition from Eli Lilly and telehealth companies selling generic products. Things got so bad that Novo Nordisk effectively ousted its CEO in May of last year. In that time, the stock has plunged, losing more than half of its value since peaking in mid-2024.
Novo Nordisk’s stock has come alive recently, and it’s no fluke. Here is why I predict that Novo Nordisk stock could soar by 40% this year.
Novo Nordisk recently made headlines by launching its newly FDA-approved Wegovy pill in early January. Wegovy and other obesity drugs have historically been subcutaneous (administered beneath the skin), requiring patients to inject them. The new pill is the same drug as Wegovy, but in an oral tablet. It’s far more convenient for most patients, especially those who don’t like needles.
The company’s new CEO has also been aggressive in pushing the Wegovy pill to the market. Novo Nordisk came ready with an ample supply and has partnered with Amazon, Costco Wholesale, and other consumer channels to make the pill as accessible as it can. The company recently reported approximately 3,100 prescriptions filled in the first week since launch and 8,000 by the second week.
Given that Wegovy is currently the only pill-form drug of its kind on the market, Novo Nordisk could see its revenue growth accelerate over the next few quarters as the pill’s launch continues. News of the pill’s early success has already lifted Novo Nordisk stock off its recent lows.
What might that mean for investors? Consider that Novo Nordisk has traded at an average price-to-earnings (P/E) ratio of 27 over the past decade. Today, shares still trade at just 18 times earnings. It doesn’t seem like a stretch that renewed faith in the company could lift that valuation back closer to its long-term norms.
Just to be conservative, one could even assume a slightly lower valuation, say a P/E ratio of 25. The consensus among Wall Street analysts is that Novo Nordisk will earn about $3.49 per share this year. Applying that P/E ratio results in a share price of $87.25. That’s about 40% above the stock’s current share price.
