Novo Nordisk (NVO) has posted its worst-ever stock performance in February as its rival Eli Lilly (LLY) continues to strengthen its leadership position in the obesity drug market amid multiple setbacks to the Danish drugmaker.
Compared to a ~17% rise in January thanks mainly to a strong commercial launch for its weight loss pill, the Wegovy maker has plunged 37% this month, while Eli Lilly (LLY) gained ~1%, reversing two consecutive months of declines.
Novo (NVO) fell 15% in early February after projecting a worse-than-expected profit decline for 2026 due to pricing headwinds from a deal with the U.S. government and patent expiry in certain markets for semaglutide, the active ingredient of Wegovy.
Most recently, the GLP-1 drugmaker fell ~16% on Monday after late-stage trial data indicated that the effectiveness of its next-gen weight loss therapy CagriSema trailed that of Eli Lilly’s (LLY) GLP-1 therapy tirzepatide, marketed as Zepbound.
While Novo (NVO) shares trade at the lowest level since mid-2021, Seeking Alpha analysts remain bullish on the stock. However, SA’s Quant System, which consistently beats the market, rates NVO as a Hold.
For SA analyst Gytis Zizys, NVO deserves a Strong Buy, as the company, after recent setbacks, looks “deeply undervalued, trading at distressed multiples despite a robust pipeline and strong financials.”
“The multiples contraction is way overdone,” the analyst wrote, raising his rating to Strong Buy from Buy this week. “At this point, the company is priced as if it is going out of business, when in reality, it continues to have an amazing pipeline with good products.”
SA analyst KM Capital upgraded the drugmaker to Hold from Sell, citing limited downside in the wake of the selloff. “The company’s market cap has dipped closer to levels before the GLP-1 mania, meaning that the share price is unlikely to decline further because NVO still remains a large and highly profitable company,” KM Capital wrote.