NVO Stock Study (9-26-25)

Posted by Mark on August 28, 2026 at 07:01 | Last modified: October 2, 2026 12:12

Just over one year ago, I did a stock study on Novo Nordisk ADR (NVO, $56.04). Apparently I never posted it and am therefore doing so now.

M* writes:

     > With roughly one-third of the global branded diabetes treatment market,
     > Novo Nordisk is the world’s leading provider of diabetes care products.
     > Based in Denmark, the company manufactures and markets a variety of
     > human and modern insulins for patients with diabetes, as well as
     > injectable and oral GLP-1 therapies, across its obesity and diabetes
     > care segment. Novo also has a rare disease segment (contributing less
     > than 10% of revenue) that specializes in protein therapies for
     > hemophilia and other disorders.

Over the past decade, this large-size company has grown sales and EPS at annualized rates of 10.4% and 12.7%, respectively. Lines are mostly up, straight, and parallel except for an EPS dip in ’19. Ten-year EPS (sales) R^2 is 0.84 (0.86) and Value Line gives an Earnings Predictability score of 90.

Over the past decade, PTPM is greater than peer and industry averages, ranging from 39.0% (’22) to 45.1% (’23) with a last-5-year mean of 42.4%. ROE is also greater, ranging from 65.7% (’20) to 96.4% (’16) with a last-5-year mean of 77.2%. Debt-to-Capital is also higher than peer and industry averages while increasing from 2.2% (’15) to 41.7% (’24) with a last-5-year mean of 25.4%.

Quick Ratio is only 0.5 but Interest Coverage is 18.3 per M* who assigns a “Wide” Economic Moat and rates the company “Exemplary” for Capital Allocation. [Strangely?] They only give a C grade for Financial Health (per BI website), however. Value Line gives an A rating for Financial Strength.

With regard to sales growth:

• YF projects YOY 8.4% and 7.6% growth for ’25 and ’26, respectively (based on 19 analysts).
• Zacks projects YOY 16.1% and 8.8% for ’25 and ’26, respectively (2 analysts).
• Value Line projects 9.8% annualized growth from ’24-’29.
• CFRA projects 10.6% YOY and 9.7% per year for ’25 and ’24-’26, respectively.
• M* gives a 2-year ACE of 8.9% annualized growth along with its own 5-year annualized estimate of 9.0% (analyst note).

My 7.0% per year forecast is below the entire range.

With regard to EPS growth:

• MarketWatch projects 22.1% and 18.7% per year for ’24-’26 and ’24-’27, respectively (based on 32 analysts).
• Nasdaq.com projects 9.0% and 14.1% per year for ’25-’27 and ’25-’28 [5, 3, and 1 analyst(s) for ’25, ’27, and ’28].
• Seeking Alpha projects 4-year annualized growth of 6.9%.
• Argus projects 5-year annualized growth of 14.0%.
• Finviz projects 5-year annualized growth of 12.6% (2).
• LSEG gives a LTG forecast of 12.0%.
• YF projects YOY 7.3% and 5.7% for ’25 and ’26, respectively (2–an odd contrast to 19, above, for sales).
• Zacks projects YOY 17.7% and 5.7% for ’25 and ’26, respectively (5), along with 5-year annualized growth of 6.8%.
• Value Line projects 6.8% annualized growth from ’24-’29.
• CFRA projects 5.6% YOY and 9.5% per year for ’25 and ’24-’26 along with a 3-year CAGR of 12.0%.
• M* projects long-term annualized growth of 9.5% (analyst note says 10.0%).

My 6.0% forecast is below the long-term-estimate range (mean of seven: 9.8%). I will use ’24 EPS of $3.28/share as the initial value rather than 2025 Q2 EPS of $3.63 (annualized).

My Forecast High P/E is 23.0. Over the past decade, high P/E increases from 30.0 (’15) to 45.1 (’24) with a last-5-year mean of 37.2 and a last-5-year-mean-average P/E of 29.9. I am below the range.

My Forecast Low P/E is 13.0. Over the past decade, low P/E increases from 20.7 (’15) to 24.8 (’24) with a last-5-year mean of 22.7. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $42.60 is default based on $3.28/share initial value. This is 24.0% less than the previous close and 5.3% less than the 52-week low.

Over the past decade, Payout Ratio ranges from 37.2% (’15) to 62.4% (’16) with a last-5-year mean of 43.9%. I am forecasting below the entire range at 37.0%.

These inputs land NVO in the BUY zone with a U/D ratio of 3.3. Total Annualized Return (TAR) is 14.1%.

PAR (using Forecast Average—not High—P/E) is slightly lower than I seek for a large company at 9.2%. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on the total annualized return (TAR) of 14.1%.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 265 studies (my study and 79 other outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and Payout Ratio are 10.4%, 9.5%, 29.4, 19.1, and 43.9%, respectively. I am lower across the board. Value Line’s projected average annual P/E of 24.0 is lower than MS (24.3) but much higher than mine (18.0).

MS high / low EPS are $5.54 / $3.38 versus my $4.39 / $3.28 (per share). My high EPS is lower due to a lower growth rate. Value Line’s high EPS of $4.40 is lower than MS and about equal to mine.

MS Low Stock Price Forecast (LSPF) of $45.00 implies Forecast Low P/E of 13.3: less than the above-stated 19.1. MS LSPF is 30.3% less than the default $3.38/share * 19.1 = $64.56 resulting in more conservative zoning. MS LSPF is still 5.6% greater than mine.

With regard to valuation, PEG is 2.1 and 2.4 per my projected P/E and Zacks, respectively: slightly overvalued (strangely, M* gives 0.7). Relative Value [(current P/E) / 5-year-mean average P/E] is quite cheap at 0.52.

MOS is strong in this study because my inputs are all below respective analyst/historical ranges and MS averages. That is further supported by an MS TAR that is 10.0% per year greater than my 14.1%.

Per U/D, NVO is a BUY under $57.20/share. Given a forecast high of $101, 101 * ((1 – ((15.0 – 1.6) / 100)) ^ 5) ~ $49 meets the BI TAR criterion [doubling in five years].

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