On Monday, Citi reiterated a Buy rating on Novo Nordisk (NOVOB:DC) (NYSE: NYSE:NVO) stock with a price target of DKK975.00. The firm's optimism is based on the strong growth in the company's GLP-1 treatments for obesity and diabetes, despite some periodic supply constraints.
Novo Nordisk has seen a 177% increase in rolling 4-week total prescriptions (TRx) growth for GLP-1 in the obesity sector, with its products Wegovy and Ozempic showing significant gains.
The pharmaceutical company is expected to generate substantial sales from its GLP-1 diabetes and obesity treatments in the coming year, with forecasts suggesting $23 billion and $9 billion, respectively, for 2024.
Peak sales could reach as high as $51 billion for diabetes and $31 billion for obesity treatments.
Current fiscal year 2024 guidance indicates sales growth at constant exchange rates (CER) of 19-27% and EBIT growth of 22-30%. These figures are in line with Citi's and consensus forecasts, which both predict 26% growth in sales and EBIT.
Novo Nordisk's Capital Markets Day (CMD) addressed several critical debates concerning the company's future, including aspirations for GLP-1 supply, the durability of the GLP-1 franchise beyond 2032, and the potential for margin expansion despite anticipated increases in operational expenses.
The company has increased its promotional activities, seeing benefits from its direct-to-consumer (DTC) campaign and outcomes from recent symposiums at the American Diabetes Association (ADA) event.
The Citi analyst also noted that Novo Nordisk's financial guidance for the year might be adjusted upward, particularly the revenue guidance. However, the earnings before interest and taxes (EBIT) guidance will likely reflect a DKK 6 billion impairment related to ocedurenone. The price target set by Citi presents a midpoint in their Bull-Bear scenario, with a potential high of DKK1,203 and a low of DKK764.
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