Novo Nordisk: Supply Strains, Competition, And RFK Concerns Mask Solid Fundamentals

Group 1 - The article emphasizes the importance of financial modeling techniques, particularly DCF analysis, to identify underlying assumptions in stock valuations [1] - A disciplined risk management strategy is advocated, utilizing a barbell approach that allocates 90% to safe assets and 10% to high-growth opportunities [1] - The DCF model assumes constant annual growth in free cash flow over the next eight years, with a fixed discount rate derived from the Capital Asset Pricing Model (CAPM) [1] Group 2 - The terminal value is calculated by projecting free cash flow into the ninth year, assuming continued growth at the same rate, and applying a perpetual growth rate using the Gordon Growth Model [1] - Key assumptions include constant growth and discount rates, with the discount rate exceeding the perpetual growth rate to ensure a finite terminal value [1] - The article highlights the necessity for free cash flow projections to accurately reflect future performance without unexpected changes [1]