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If you are wondering whether Novo Nordisk’s current share price reflects its long term potential or if the recent pullback has gone too far, you are in the right place.
The stock last closed at US$49.37, with returns of 16.2% decline over 7 days, 16.1% decline over 30 days, 5.8% decline year to date, 40.0% decline over 1 year and 28.4% decline over 3 years, while the 5 year return stands at 38.4%.
Recent headlines around Novo Nordisk have kept attention on its role in the global pharmaceuticals and biotech space, with ongoing discussion about its key drug portfolio and the competitive pressures in the sector. This context has shaped how investors are thinking about both the recent price weakness and the longer 5 year gain.
Simply Wall St’s valuation checks currently give Novo Nordisk a score of 5/6, which we will unpack using different valuation approaches and then circle back to an even more useful way to think about what that score really means for you.
Find out why Novo Nordisk’s -40.0% return over the last year is lagging behind its peers.
A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today, aiming to estimate what the business might be worth right now based on those cash flows.
For Novo Nordisk, the latest twelve month free cash flow is DKK 52,097.16m, so about DKK 52.1b. Analysts and Simply Wall St’s 2 Stage Free Cash Flow to Equity model project free cash flow reaching DKK 134,803.60m, or roughly DKK 134.8b, by 2030. Estimates for the next few years come from analysts, while the later years are extrapolated by Simply Wall St based on those inputs.
After discounting these projected cash flows, the model arrives at an estimated intrinsic value of US$140.21 per share. Compared to the recent share price of US$49.37, this implies the stock trades at roughly a 64.8% discount to that DCF estimate, which indicates that the shares appear significantly undervalued on these assumptions.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Novo Nordisk is undervalued by 64.8%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.
NVO Discounted Cash Flow as at Feb 2026
For a profitable company like Novo Nordisk, the P/E ratio is a straightforward way to link what you pay for each share to the earnings that business is currently generating. It helps you see how many dollars investors are willing to pay today for one dollar of current earnings.
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What counts as a “normal” P/E depends heavily on how fast earnings are expected to grow and how risky those earnings might be. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk tends to point to a lower, more conservative P/E range.
Novo Nordisk currently trades on a P/E of 13.49x. That is below the Pharmaceuticals industry average of 21.18x and also below the peer average of 25.08x. Simply Wall St’s Fair Ratio for Novo Nordisk is 31.30x, which is a proprietary estimate of a more tailored P/E level given factors such as the company’s earnings growth profile, industry, profit margins, market cap and risk characteristics.
This Fair Ratio is more tailored than a simple comparison with peers or the broad industry because it adjusts for company specific traits rather than assuming one size fits all. Comparing the 13.49x P/E with the 31.30x Fair Ratio indicates that Novo Nordisk appears undervalued on this metric.
Result: UNDERVALUED
NYSE:NVO P/E Ratio as at Feb 2026
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Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to your own assumptions for future revenue, earnings, margins and a fair value estimate. A Narrative takes what you believe about Novo Nordisk, such as how it handles competition in diabetes and obesity or how important its obesity pill and wider cardio metabolic pipeline might be, and ties that story to a financial forecast that produces a Fair Value you can compare with the current share price. This can help you decide whether it might be a time to buy, hold or sell. On Simply Wall St, Narratives live in the Community page and are easy to use, with millions of investors sharing views that are automatically refreshed when new information, like earnings or major news, is added. For example, one Novo Nordisk Narrative on the platform currently sets fair value at about US$95 per ADR while another sits nearer US$65.50. That spread shows how different, reasonable stories about the same company can lead to different decisions.
Do you think there’s more to the story for Novo Nordisk? Head over to our Community to see what others are saying!
NYSE:NVO 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NVO.
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