Novo Nordisk Downgraded to Hold by Analyst Amid Competition Concerns

Novo Nordisk's stock fell 6% after analyst HSBC's Rajesh Kumar downgraded his recommendation from "buy" to "hold", citing concerns about competition from compounded weight-loss drugs. Kumar believes current estimates for total GLP-1 drug sales may be overestimated, and lowered his price target to 360 Danish krone ($55.49) per share. Despite this, the analyst notes that the popularity of Wegovy and similar drugs suggests the fundamentals will remain strong.

Novo Nordisk's stock experienced a significant downturn on July 31, 2025, following a downgrade in its analyst recommendation from "buy" to "hold" by HSBC's Rajesh Kumar. The stock fell by nearly 6% as Kumar expressed concerns about competition from compounded weight-loss drugs, which he believes may overestimate current sales estimates for GLP-1 drugs. Kumar lowered his price target to 360 Danish krone ($55.49) per share from his previous 680 krone ($104.81) target [1].

The analyst cited the U.S. Food and Drug Administration's (FDA) ban on compounded weight-loss drugs as a factor, noting that although the FDA has outlawed the practice, rivals continue to sell such drugs illegally. Kumar expects this situation to persist in the near future, which could impact current sales estimates for Novo Nordisk's GLP-1 drugs, such as Ozempic and Wegovy [2].

Despite the downgrade, Kumar acknowledged that the popularity of Wegovy and similar drugs suggests that the company's fundamentals will remain strong. The analyst's concerns about competition, however, may influence investor sentiments and the stock's performance [3].

The stock's performance also reflects broader market conditions and analyst recommendations. GuruFocus estimates the estimated GF Value for Novo Nordisk AS (NVO) in one year is $166.65, suggesting an upside of 248.03% from the current price of $47.8838. The consensus recommendation from 16 brokerage firms is currently "Hold," indicating a cautious outlook [4].

The potential impact of the federal government's support for weight-loss drugs may also influence Novo Nordisk's stock performance. The Trump administration is reportedly planning a five-year experimental program to subsidize the costs of such medications, which could significantly boost sales for the company. However, this news is still under consideration and may not have an immediate impact on the stock [5].

In conclusion, Novo Nordisk's stock experienced a notable decline following HSBC's Rajesh Kumar's downgrade, driven by concerns about competition from compounded weight-loss drugs. The analyst's views, along with broader market conditions and the potential impact of federal support for weight-loss drugs, will likely shape the stock's future performance.

References:
[1] https://finance.yahoo.com/news/why-novo-nordisk-stock-crumbled-220500133.html
[2] https://www.gurufocus.com/news/3023477/novo-nordisk-nvo-downgraded-to-hold-by-hsbc-nvo-stock-news
[3] https://www.aol.com/why-novo-nordisk-stock-bumped-212600281.html
[4] https://finance.yahoo.com/news/why-novo-nordisk-stock-bumped-212600781.html
[5] https://www.aol.com/why-novo-nordisk-stock-bumped-212600281.html