|
Hey there, bargain hunter. A year ago Novo Nordisk was still the undisputed king of the GLP-1 market. This Wednesday, November 4, it reports a quarter where Wall Street expects earnings of $0.73 per share on $11.11 billion in revenue. Twelve months earlier those numbers were $1.02 and about $11.5 billion. That gap tells you most of what you need to know going in.
ScoreboardThe consensus EPS estimate for Q3 2026 stands at $0.73, a nearly 28% year-over-year decline. Revenue is expected at $11.11 billion, down roughly 3% to 4% from the same quarter in 2025. Full-year 2026 adjusted sales guidance sits at 0% to -6% at constant exchange rates, a range Novo raised on August 4 after a Q2 beat of $0.96 per share against a $0.77 consensus. The beat-and-raise playbook is still intact on paper. The question is whether it can run in a market the company is actively losing. What Actually HappenedThree things converged this past week that define how Wednesday's call will be received. First, on October 26, a federal judge in New Jersey refused to block Eli Lilly from running comparative advertising claiming Zepbound and Mounjaro outperform Wegovy and Ozempic. The judge found that Novo had failed to demonstrate irreparable harm, and pointed to Novo's own prior use of comparative advertising as a factor that undercut its request. Lilly gets to keep running those ads while the lawsuit crawls forward. Second, Novo committed earlier this year to cut U.S. list prices for Wegovy, Ozempic, and Rybelsus to $675 per month effective January 1, 2027. That is an approximately 50% reduction for Wegovy from the current list price. Wegovy was above $1,350 per month not long ago. And third, Lilly's oral obesity pill, Foundayo (orforglipron), won FDA approval on April 1, and Lilly has said it has about a 70% share of the Medicare GLP-1 program. Lilly has also said it holds about a 61% share of the broader U.S. GLP-1 market. Lilly's ambitions extend well beyond the GLP-1 market itself. Lilly is deploying its obesity cash flows to build an entirely new therapeutic franchise in women's health, a move that signals how durable management believes its competitive advantage will be.
|
|
You Don't Need to Buy a Single IPO to Profit From the Boom
SpaceX already went public and Anthropic and OpenAI could be right behind. Income expert Tim Plaehn uncovered a little-known fund that lets you play the whole wave while getting paid monthly: up to $1,104 in a single month.
Watch the free IPO Income presentation here.
|
The Business and What It Actually SellsNovo's revenue engine is semaglutide in several forms: Ozempic for type 2 diabetes, Wegovy for obesity, and the once-daily Wegovy pill, approved in December 2025, which has exceeded 5 million total U.S. prescriptions since launch. The oral pill was supposed to be the next leg of growth. It still may be. But Lilly's Foundayo, which can be taken any time of day without food or water restrictions, arrived faster than many anticipated and has been taking share week by week. Key Metrics to Track
- Q3 EPS consensus: $0.73 vs. $1.02 a year ago
- Q3 revenue consensus: $11.11 billion vs. about $11.5 billion a year ago
- Full-year 2026 adjusted sales guidance: 0% to -6% at constant exchange rates
- Full-year 2026 consensus EPS: approximately $3.42, implying -13.6% year-over-year
- Wegovy new list price effective January 1, 2027: $675/month, an approximately 50% cut
- Lilly's U.S. GLP-1 market share as of mid-2026: approximately 61%
- NVO trailing P/E as of late October 2026: approximately 10x
- NVO 10-year average P/E: approximately 25x
Is It Cheap?At around $40 per share and a trailing P/E near 10x, NVO trades at a 60% discount to its own 10-year average multiple of roughly 25x. Lilly, by comparison, trades above 30x forward earnings. The PEG ratio on NVO has collapsed below 1.5 even on declining estimates. That is an optically compelling number. The catch is that cheap multiples are only a bargain if earnings find a floor, and no one on the sell side is yet confident they have. The $675 list-price cut that hits January 2027 has not been fully modeled into 2027 estimates yet. If net price realization falls meaningfully alongside list price, next year's $3.42 consensus could prove too high. That is the melting ice cube scenario. Bull, Base, and BearBull: Oral Wegovy continues its adoption curve, the January price cut pulls in millions of previously uninsured patients, and the volume gain offsets the price reduction. The 10x multiple re-rates toward 15x as the earnings decline stabilizes. That alone is 50% upside from current levels before any earnings growth.
|
|
10 Companies Powering the AI Infrastructure Buildout Our analysts did a deep dive into what it will take for the entire AI industry to scale simultaneously and identified 10 companies that are crucial to the AI infrastructure buildout that is underway. From memory, storage and connectivity to fabrication and beyond, these companies are building the ecosystem that will power the next round of growth for the AI industry. Get the details, free |
Base: Q3 comes in modestly above the $0.73 consensus as Novo's beat history holds, management keeps full-year guidance intact, and the stock drifts sideways through year-end as the market waits to see January pricing data. Bear: Wednesday's call includes a guidance cut, the January list-price reset compresses net revenue faster than volume expands, generic Ozempic entry accelerates following Cipla's ANDA filing, and analysts trim 2027 numbers. The stock revisits its March 2026 low near $36. Action PlanDo not buy the full position before Wednesday. The earnings call carries binary risk, particularly around any guidance revision and management's language on the January price cut impact. If the number beats and guidance holds, a starter position at current levels, sized at roughly one-third of your intended allocation, makes sense. Add the second third only after Q4 results in February confirm the pricing transition is proceeding as modeled. Hold the final third in reserve for the bear case. Cheap Investor Checklist
- Does Q3 EPS beat the $0.73 consensus?
- Does management affirm or raise 2026 guidance on the Wednesday call?
- Is the January 2027 list-price cut language more or less aggressive than the February announcement?
- Does Wegovy oral prescription volume continue to grow week-over-week through Q4?
- Does Foundayo's market share in the oral GLP-1 segment exceed one-third by year-end?
- Does the Cipla generic Ozempic ANDA proceeding accelerate toward a court date?
- Does the Sandoz semaglutide patent challenge at the Unified Patent Court reach a ruling?
- Does NVO's forward P/E compress below 10x on estimate cuts, or hold above 11x?
Bottom LineIf Novo beats Wednesday and holds guidance, the stock is priced for more bad news than is likely to arrive. If management cuts guidance again, the P/E looks cheap right up until the earnings number itself falls further. The price to pay for a real position is patience: let the call land, then decide. A 10x multiple on a business with about 60% return on equity and roughly a 3% dividend yield is a starting point worth watching. It is not yet a conviction buy. |
Tidak ada komentar:
Posting Komentar