Analysts Have Been Trimming Their Novo Nordisk A/S (CPH:NOVO B) Price Target After Its Latest Report

Last week saw the newest second-quarter earnings release from Novo Nordisk A/S (CPH:NOVO B), an important milestone in the company's journey to build a stronger business. Novo Nordisk reported in line with analyst predictions, delivering revenues of kr.77b and statutory earnings per share of kr.5.96, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Novo Nordisk's 22 analysts are now forecasting revenues of kr.321.3b in 2025. This would be a modest 3.0% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be kr.24.90, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of kr.322.3b and earnings per share (EPS) of kr.25.26 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for Novo Nordisk

The consensus price target fell 6.9% to kr.501, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Novo Nordisk, with the most bullish analyst valuing it at kr.865 and the most bearish at kr.340 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Novo Nordisk's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2025 being well below the historical 21% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.3% annually. So it's pretty clear that, while Novo Nordisk's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Novo Nordisk analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Novo Nordisk (2 make us uncomfortable!) that we have uncovered.

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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.