Novo Nordisk target cut by Deutsche Bank despite long-term optimism Proactive uses images sourced from Shutterstock
Deutsche Bank has cut its price target for Novo Nordisk (NYSE:NVO) by 16% to DKK400 following a turbulent week for the Danish pharmaceutical group, citing revenue headwinds, management uncertainty and clinical trial risks.
Emmanuel Papadakis, equity analyst at Deutsche Bank, described the period post fourth-quarter results as “the best of times, the worst of times”, reflecting a mix of strong product potential and acute business volatility.
He warned of a “double-digit revenue decline” in the current year, but said the stock was back to trading at a “mid-teens price-to-earnings ratio”, supported by the launch of its oral obesity treatment and possible demand recovery in the second half.
“We are clear-eyed that the volatility is tough to stomach, the management situation remains fluid, business visibility is limited and there remains a clear downside scenario,” Papadakis said, adding that data from trials of CagriSema, a key obesity treatment candidate, would be critical.
Despite the target cut, Deutsche Bank reiterated its ‘buy’ rating.
In mid-afternoon, the shares were off 2.4% to DKK307.55.