Is It Time to Buy the Dip in Novo Nordisk Stock?

Core Viewpoint - Despite a double beat in quarterly earnings, Novo Nordisk A/S stock is down nearly 50% in 2025, trading near its 52-week low, presenting a potential buying opportunity for long-term investors [1] Group 1: Market Position and Competition - Novo Nordisk holds a 72% market share in the GLP-1 drug space, making it vulnerable to competition, particularly from Eli Lilly's new oral GLP-1 drug, which has shown better efficacy than Novo Nordisk's Rybelsus [4] - The company has submitted an application for an oral version of Wegovy, with FDA approval expected by year-end, and has entered a $2.2 billion deal with Septerna to co-develop new oral therapies targeting obesity [5] Group 2: Recent Developments - President Trump's executive order on drug pricing may impact Novo Nordisk, particularly regarding GLP-1 drugs, as it emphasizes drugs with significant disparities and expenditures [3] - CVS Health announced it will remove Zepbound from its formulary, continuing to offer only Wegovy for weight-loss treatment, a decision made independently by CVS [6] Group 3: Financial Metrics and Analyst Ratings - Novo Nordisk is trading at a forward P/E ratio of around 17x, indicating it is undervalued compared to its historical averages [7] - Analysts have a consensus Hold rating on the stock, with a 12-month price target of $135, representing a 108% upside from the current price of $64.32 [8] Group 4: Stock Performance and Sentiment - As of May 14, 2025, NVO stock has not reclaimed its 50-day simple moving average of around $70, which has acted as a resistance point [9] - There has been a 31% rise in short interest over 30 days, indicating growing bearish sentiment despite low short volume relative to float [9]