Novo Nordisk Earnings Preview: Q4 Growth Driven by Weight Loss Drug Expansion and Innovative Therapies

Analysts have unanimously issued a buy rating and have raised the target price. According to the analyst ratings feature on Moomoo, the average consensus target price provided by analysts is 117.5 USD, with the highest target price at 120 USD, representing an 11% increase from the current price. Below is one chart for reviewing earnings forecasts and analyst ratings.

GLP-1s mimic the body's hormone to decelerate digestion and enhance insulin secretion, spearheading obesity and diabetes therapies, with Novo and Eli Lilly as market leaders.

J.P. Morgan anticipates sustained robust revenue growth for Novo Nordisk this quarter, projecting a YoY increase of 35%, reaching DKK 65.1 billion, potentially driven by elevated projections for Ozempic, especially following an adjustment in US rebates at the year's end.

J.P. Morgan has also projected Wegovy sales for Q4'23 at DKK 9.8 billion, with US sales anticipated to reach around DKK 9.2 billion and an additional DKK 700 million expected from international markets. This reflects Novo Nordisk's ongoing expansion into more countries beyond the US. The growth includes increases in Denmark and Norway, as well as the recent product launches in Germany and the UK.

Moreover, according to Bloomberg, sales of Ozempic and Wegovy, the key drivers, could hit DKK 26.4 billion (YoY+56%) and DKK 10.6 billion (YoY+335%) this year, respectively. Ozempic has maintained a growth rate exceeding 56% YoY for the past year, while Wegovy has seen even higher acceleration, with each quarter of the past year experiencing a YoY increase at a multiple-fold rate, demonstrating strong market acceptance and prospects for the company's key products.

In 2023, Operating Profit outpaced sales with over 30% growth. J.P. Morgan predicts Novo to align Operating Profit growth with sales due to increased R&D spending. Analysts foresee Novo to begin the year guiding 16-22% Operating Profit growth at CER. Due to recent FX volatility, a -5 % headwind on operating profit is expected.

The SELECT trial results revealed Wegovy rapidly lowers cardiovascular risk in obese patients upon treatment start and has been shown to help achieve an average weight loss of 15%.

In recent months, Novo has sought US and EU approval for Wegovy for cardiovascular risk reduction. Approval may ease supply constraints, with CFO Karsten Munk Knudsen projecting a substantial increase in US supply in 2024 compared to 2023. Last week, the EU Medicines Agency considered the broader use of Wegovy, including its potential to reduce the risk of stroke and heart disease. The US FDA has also indicated that it will grant Priority Review designation.

Moreover, J.P. Morgan predicts that future drivers to look out for following the results include potential announcements in the Q4 conference call regarding Phase I trials for Oral Amycretin in Obesity.

Headline data from the Phase III (FLOW) study evaluating Ozempic for Type 2 Diabetes are slated for release in the first quarter of 2024. Novo Nordisk has halted its FLOW trial on renal outcomes in last October, following a recommendation from an independent committee. The interim results indicated significant efficacy, which, if confirmed, could positively impact Ozempic's sales.

Additionally, Novo Nordisk partners with Omega Therapeutics and Cellarity on deals up to $532 million each, targeting thermogenesis for fat burning and treatment for MASH, a liver disease linked to diabetes and obesity.