Novo Nordisk Stock Surges as UBS Upgrades Ozempic Maker, Calls Sell-Off 'Overdone'

Novo Nordisk A/S (NYSE: NVO) shares rose on Wednesday, buoyed by an upgrade from UBS analysts who deemed the recent sell-off in the stock "overdone." The Danish pharmaceutical giant's stock climbed 3.5% in premarket trading following the bullish note from UBS, which upgraded its recommendation on the company from "neutral" to "buy."

The UBS analysts, led by CagriSema, cited strong demand for GLP-1 medications and called Novo Nordisk "the most exciting growth story in European pharma." They also noted that the company's recent price target cut from DKK 1100 to DKK 750 implies a 21% upside potential for the stock.

Novo Nordisk's stock has erased 40.7% over the last six months, worsened by a nearly 20% bear gap back in late December following an update on the company's weight loss drug CagriSema. The stock's 14-day relative strength index (RSI) currently ranks at 15.4, signaling potential rebound opportunities.

Options may be an attractive choice for those eyeing the security, per its Schaeffer's Volatility Index (SVI) of 33% that sits in the 11th percentile of its annual range. This suggests options traders now anticipate lower-than-usual volatility expectations.



Novo Nordisk's leading drug Ozempic (semaglutide) is forecast to demonstrate a growth of 23% in its sales to $12.5 billion in 2023, consolidating its position as the dominant market leader. The drug is projected to sustain its sales growth over the next five years, with an expected annual sales figure of $17 billion in 2029. This represents a significant 83% increase in sales between 2022 and 2029, demonstrating a compound annual growth rate (CAGR) of 9%.

The strong sales growth of Ozempic reinforces its continued dominance in the type 2 diabetes market. As attitudes towards insulin access evolve, Ozempic is well-positioned to provide support to a greater number of patients suffering from type 2 diabetes, facilitating improvements in their quality of life.



Novo Nordisk's recent price target cut and the analysts' upgrade highlight the potential for the company's stock to rebound from its recent sell-off. With strong demand for its GLP-1 medications and a dominant position in the type 2 diabetes market, Novo Nordisk appears well-positioned to capitalize on the growing demand for diabetes treatments. As the company continues to invest in R&D and expand its product portfolio, investors may want to consider adding the stock to their watchlist or even initiating a position.