NVO Stock Study (10-2-26)

Posted by Mark on August 31, 2026 at 07:13 | Last modified: October 2, 2026 11:03

I recently did a stock study on Novo Nordisk ADR (NVO, $37.40). The previous study is here.

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 10 years, this large-size company grows sales and earnings at annualized rates of 12.9% and 14.6%. Lines are mostly up, straight, and parallel except for an EPS dip in ’19. Ten-year earnings R^2 is 0.89 and Value Line (VL) gives an Earnings Predictability score of 90. Shares outstanding decrease 12.3% (1.4%/year).

Over the past 10 years, PTPM leads peer averages but trails the industry while ranging from 39.0% in ’22 to 45.1% in ’23 with a last-5-year mean of 42.4%. ROE leads peer and industry averages despite falling from 96.4% in ’16 to 57.9% in ’25 with an eye-popping last-5-year mean of 75.6% (shareholder equity consistently positive and growing 18.9% per year). Debt-to-capital is less than peer and industry averages despite increasing from 0.5% to 40.3% (’25) with a last-5-year mean of 30.6%.

Quick ratio is 0.64 and interest coverage N/A per M* (18.8 per Google AI) who assigns “Wide” Economic Moat and gives a “Standard” rating for Capital Allocation. VL gives an A+ grade for Financial Strength.

RightStock—a new tool on the BI website that I will be tracking for informational purposes—gives a fitness score of 83 and opportunity score of 100.

This is where any hope of “high-quality growth stock” goes out the window for many: just after clearing the barbed wire fence.

With regard to sales growth:

• YF gives YOY ACE 2.9% contraction and 1.3% growth for ’26 and ’27 (based on 27 analysts).
• Zacks gives YOY ACE 1.5% contraction and 2.3% growth for ’26 and ’27 (5 analysts).
• VL projects 4.4% growth per year from ’25-’30.
• CFRA projects contraction of 5.4% YOY and 1.4% per year for ’26 and ’25-’27, respectively.
• M* gives a 2-year ACE of 0.3% while projecting 4.1% per year from ’25-’30 in Equity Report.

My 1.0% per year forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE contraction of 4.8% and 0.5% per year for ’25-’27 and ’25-’28 (based on 5 analysts).
• Nasdaq.com gives annualized growth of -1.0% and 1.8% for ’26-’28 and ’26-’29 [7 / 3 / 1 analyst(s) for ’26 / ’28 / ’29].
• Argus gives 5-year annualized growth of 14.0%.
• Seeking Alpha projects 4-year annualized contraction of 0.6%.
• Finviz gives 5-year annualized ACE of zero (5).
• LSEG has LTG at -1.9%.
• YF gives ACE YOY contraction of 1.2% and 3.1% for ’26 and ’27, respectively (8).
• Zacks gives ACE YOY contraction of 10.6% and 3.4% for ’26 and ’27 along with 5-year annualized growth of 8.6% (7).
• VL projects 2.6% growth per year from ’25-’30.
• CFRA projects contraction of 8.6% YOY and 2.9% per year for ’26 and ’25-’27, respectively.
• M* gives long-term ACE of 2.7% (also in Equity Report).

My 0.5% forecast is near bottom of the long-term-estimate range (mean of eight: 3.5%). Initial value is ’25 EPS of $3.48/share rather than 2026 Q2 EPS of $4.09 (TTM).

My Forecast High P/E is 22.0. Over the past decade, high P/E ranges from 23.1 in ’18 to 39.3 in ’22 (excluding 45.1 in ’24) with last-5-year mean of 35.2 and a last-5-year-mean average P/E of 28.4. I am below the range.

My Forecast Low P/E is 8.0. Over the past decade, low P/E ranges from 12.4 in ’25 to 26.5 in ’22 with a last-5-year mean of 21.6. I am forecasting well below the range.

My Low Stock Price Forecast (LSPF) of $27.80 is default based on initial value from above: 25.7% less than previous close and 20.8% less than the 52-week low.

Over the past 10 years, payout ratio (PR) ranges from 37.7% in ’23 to 62.4% in ’16 with a last-5-year mean of 44.4%. My 37.0% forecast is below the range.

These inputs land NVO in the BUY zone with a U/D ratio of 4.3. Total Annualized Return (TAR) is 17.7%.

PAR (using Forecast Average—not High—P/E) of 9.9% is less than I seek for a large-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on 69 studies done in the past 90 days (my study and 31 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 3.6%, 4.0%, 25.2, 15.0, and 44.4%, respectively. I am lower across the board. VL projects a future average P/E of 20.5 that is greater than MS (20.1) and greater than mine (15.0).

MS high / low EPS are $4.89 / $3.80 versus my $3.57 / $3.48 (per share). My high EPS is less due to a lower growth rate and initial value. VL (M*) high EPS of $4.50 ($3.97) is in the middle.

MS LSPF of $35.10 implies a Forecast Low P/E of 9.2: less than the above-stated 15.0. MS LSPF is 38.4% less than the default $3.80/share * 15.0 = $57.00 resulting in more conservative zoning. MS LSPF is still 26.3% greater than mine.

MOS is robust in the study because my inputs are near or below historical/analyst/MS estimates and ranges. Supporting the MOS is MS TAR exceeding mine by 7.1% per year and my lower LSPF.

With regard to valuation, PEG is 1.2 and 0.4 per Zacks and M*, respectively: undervalued on average. Relative Value is about lowest I’ve seen at 0.32 [(current P/E) / 5-year-mean average P/E]. “Quick and dirty” cash flow [including capex, which Google AI insists is correct (quite an interesting deliberation)] has stock undervalued by 60%. M* reports stock undervalued by 12%.

Per U/D, NVO is a BUY right now under ~$40/share. Given $78.50 forecast high price, [78.5 / ((13.17 / 100 ) +1 ) ^ 5] ~ $42 meets the BetterInvesting® TAR criterion.

Personally, I love these situations: growth is discounted to almost nothing resulting in a huge MOS while still ending up as a “buy.” RightStock clearly agrees with the opportunity. The big question is whether the lack of growth will be predictive of a Rule of Five loser (“value trap”).

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